Banks say crude prices have further to rise: Update

Adds Barclays comment throughout

Bank analysts see no immediate end in sight to rising crude prices, which neared all-time highs yesterday as the US and the EU talk about potential moves to reduce purchases of Russian oil.

Russian energy commodities are so far explicitly excluded from the brunt of financial sanctions that the US, the EU and other countries have imposed against Moscow in response to its invasion of Ukraine. But with Washington talking about it with its European partners, and oil companies imposing a level of self-sanctioning in refusing to trade Russian oil, benchmark crude prices have hit levels not seen since 2008, and never before that. The Ice front-month May Brent contract, which topped out yesterday at $139.13/bl, was at $132.34/bl as of 15:27 GMT today.

UK-based Barclays said a complete halt to Russian seaborne crude and products exports would probably push Brent above $200/bl this year. US banks BofA Securities and Goldman Sachs said Brent could hit $175/bl, although these are not the base cases for either. BofA Securities based it on what it called its "ugly" scenario, where restrictions on Russia lead to "major structural deficits", and said this could happen as soon as the second quarter.

Goldman Sachs said there would need to be a "sustained two-thirds reduction of Russian seaborne exports" for crude to reach $175/bl, and it put the chances of this happening at 15pc.

Swiss bank UBS said "a prolonged war… could see Brent moving above $150/bl", but said its short-term forecast for Brent, of $125/bl, is a "soft cap" above which demand growth should slow and US output should increase.

BofA's baseline scenario, in which Russian commodity flows are fundamentally rerouted away from Europe and the US but no major structural deficits emerge, sees Brent rising to $130/bl in the second quarter and averaging $110/bl this year. Goldman Sachs said its most likely scenario is for a supply disruption of 1.6mn b/d, and it sees Brent spot prices averaging $135/bl this year. Barclays maintained its $92/bl Brent forecast for this year, but said there is probably a $25/bl upside to that even if disruption to Russian supply does not deepen further.

By Ben Winkley