Bank of Canada: Brent crude oil prices are expected to drop to around $70 by the end of 2027

According to Golden Ten Data on July 15, the Bank of Canada stated that a major risk for inflation to rise is that companies may pass on increased input costs to consumers, which would create new price pressures. The bank is also concerned that its estimates for productivity may be “weaker than previously assumed,” which would mean a smaller economic output gap and greater inflation pressure. Downside risks to inflation listed by the Bank of Canada include a potential tightening of global financial conditions and a weaker-than-expected domestic economic recovery. The Bank of Canada expects Brent crude oil prices to fall to about $70 by the end of 2027 and noted that the outlook for oil prices is highly uncertain. This forecast is based on the July 9 futures price curve and is slightly lower than the forecast in April. Policymakers also raised their export outlook, partly due to increased “energy-related activities.”