Weak Demand Drives Oil Prices, Volatility Looms: JP Morgan, Goldman Sachs

SEATTLE (Oil Monster): Global oil markets are facing increasing uncertainty as JPMorgan Chase and Goldman Sachs converge on a key outlook: weak demand is the primary force behind falling crude prices, despite ongoing geopolitical tensions.

Recent disruptions in the Strait of Hormuz and escalating Middle East conflicts briefly pushed oil prices higher. WTI Crude surged over 8% intraday, while Brent Crude climbed nearly 6%, recovering losses from the previous week.

However, both banks caution that underlying fundamentals remain weak. Goldman Sachs highlighted that soft demand for petrochemical feedstocks and jet fuel—driven by high refined product prices—is exerting downward pressure on crude markets. It maintained its 2026 price forecasts at $83 per barrel for Brent and $78 for WTI, assuming supply flows normalize.

JPMorgan echoed this view, noting that declining inventories and constrained supply should have supported prices. Instead, the continued drop signals fragile demand conditions, particularly in Europe, where refining margins have turned sharply negative.

Looking ahead, both institutions warn that shrinking inventories and potential refinery cuts could intensify market volatility. The evolving balance between geopolitical risks and weak consumption will remain central to oil price direction.

YOU MAY ALSO BE INTERESTED IN:

The Iran war has shattered oil's price compass

More than 20 vessels pass Strait of Hormuz on Saturday, Kpler data shows