“The conflict is unique, but in 2008, the severe risk-asset reversion was aggravated by a sharp rally in West Texas Intermediate crude oil to its peak around $145 a barrel,” said McGlone.
The analyst believes the crude oil market will likely mirror past reversion patterns from elevated prices. Brent crude has dropped about 80% on three occasions since the 2008 peak. “It’s possible that Russia’s invasion of Ukraine triggers a global recession and accelerates electrification and decarbonization trends,” said McGlone.
According to Bloomberg, should prices sustain near end-of-February levels, it should be a boon for energy and agriculture producers. Crude oil and most grain prices are currently trending well above US production costs.
