Oil prices are facing a ‘battle royale’ between Saudi Arabia and the Federal Reserve, Bank of America says

Oil prices are facing a ‘battle royale’ between Saudi Arabia and the Federal Reserve, Bank of America says

Oil prices will remain under pressure until the Fed eases up on monetary tightening, Bank of America said.

Meanwhile, Saudi Arabia is trying to boost oil prices by cutting production.

Energy markets are facing a "battle royale" between the top oil exporter and the Federal Reserve.

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Saudi Arabia and the Federal Reserve are locked in a "battle royale" over oil, and crude prices are likely to remain under pressure until the Fed pulls back on its tight monetary policy, according to Bank of America.

In a note last week, BofA commodities strategist Francisco Blanch pointed to the downward trend in oil prices compared to last summer, when oil hit triple digits.

Those price drops over the past year are largely due to the Fed's aggressive monetary tightening policy, which has raised expectations of weaker economic growth, overriding the impact of production cuts from Saudi Arabia and other major suppliers, he said.

"At their core, markets are witnessing a battle royale between Saudi Arabia and the US Federal Reserve, pitting Prince Abdulaziz bin Salman against Chairman Jay Powell," Blanch said in the note, later