Goldman Sachs Sees Oil Prices Face Dual-Direction Risk From Weak Demand, Middle East Supply Loss

According to Goldman Sachs on May 31, oil prices face dual-direction risks as weakening demand and potential Middle East supply losses compete. Analyst Daan Struyven and colleagues found April oil sales data from Western Europe implies downside risk to demand of about 2 million barrels per day, adding roughly $10 per barrel downside risk to their fourth-quarter Brent crude forecast of $90. Goldman Sachs noted that while Middle East supply disruptions from Iran conflict pose significant upside price risk, demand weakness creates material downside risk as actual oil consumption may fall more than expected due to price increases.
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