Goldman Sachs CEO Warns Oil Shock Could Alter Consumer Behavior
Goldman Sachs CEO Warns Oil Shock Could Alter Consumer Behavior Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
Tightening crude oil supply will lead to consumer behavior changes in the second half of the year as the imbalance with demand pushes inflation higher, the chief executive of Goldman Sachs has warned.
Speaking at an industry event in New York, David Solomon suggested consumers are already changing their behavior in response to higher energy prices, and those changes could become more pronounced after July.
He added, asquotedby Reuters, that the Fed will likely keep interest rates unchanged because of these developments.
“You can see some economic data in the next six months that shifts the sentiment,” Solomon said.
“But for the moment, that's not coming through.” Despite soaring energy prices, the top executive also added that investor sentiment about the tech industry is very optimistic.
“We are definitely in a moment where there's more greed than there is fear,” Solomon said.
inflation rose at the fastest rate in three years in April, prompting growing concerns about the rest of the year if the war in the Middle East drags on, which seems to be the most realistic scenario right now.
Oil prices justgot a fresh boostearlier today from reports about Iran launching strikes on targets in Kuwait and Bahrain, and the U.S.
shooting at a tanker headed for the Iranian coast.
Brent crudewas trading at over $97 per barrel at the time of writing, following the news, andWest Texas Intermediatewas at close to $95 per barrel.
Earlier this week, Goldman commodity analystssaidin a note that demand destruction resulting from higher prices will somewhat soften the blow from physically tighter oil markets.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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