Oil slump now driven by demand as well as Middle East supply, Goldman says

Markets spent months focused on possible supply disruptions in the Middle East, yet Brent crude futures have fallen about 20% from their late-March peak even as flows through the Strait of Hormuz remain low. Goldman Sachs says the slide reflects more than easing supply fears: demand-related forces are weighing on the market.

"Actual end-use oil demand may have fallen more in response to higher prices than expected," Goldman wrote, pointing to two main factors—destocking and weaker consumption. Early fears that the Iran conflict would escalate had pushed businesses to build inventories and investors to bet on higher prices, but those trends reversed as optimism about a potential deal grew; Brent was 3.1% higher at $93.90 a barrel at 3:08 a.m.

ET on Monday. Higher prices appear to be hitting jet fuel and petrochemical products particularly hard, and road-fuel demand is showing weakness in China and parts of Europe.

brent crude, goldman sachs, oil demand, destocking, jet fuel, petrochemicals, road fuel, inventories, iran conflict, prices