Oil's had a pretty good year.
The commodity's seen a nice rally in light of a weaker US dollar, stronger economic data from China, decreasing non-OPEC production, and a continued rise in demand.
WTI crude and Brent crude were around $48 per barrel on Monday, well above their lows below $30 per barrel earlier this year.
But all of that may come crashing down if one "black swan event" transpires, argued a Bank of America Merrill Lynch global-commodities research team.
From their recent note to clients (emphasis added):
Global GDP in US dollar terms at market exchange rates is stagnant. Continued US dollar strength could force Saudi Arabia either to cut oil production modestly and push Brent back to $50 or de-peg the Saudi riyal, our black swan event, which could lead Brent to collapse to $25/bbl.
While this certainly sounds ominous for the oil market, it's worth noting that analysts and financiers are split on whether the Saudis will actually de-peg their currency and undo the current fixed exchange rate with the US dollar.
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