www.zerohedge.com BY TYLER DURDEN
Earlier today, when discussing the various supply-driven actions at the disposal of politicians and markets to reduce the price of oil including SPR releases, core-OPEC surge, and potential lift of sanctions on oil imports from Iran and Venezuela – Goldman said that while such measures could help offset a sizable decline in Russian seaborne exports, they would leave the global oil market with no buffer, still requiring demand destruction through higher prices. In fact, Goldman – as well as JPMorgan, BofA and MS – have also been saying that demand destruction – i.e., a sharp, induced economic slowdown – is the only solution to soaring oil prices.
Well, sure enough, demand destruction is now here, gradually at first and then all at once.
Stratospheric oil prices are flowing through into the plastics industry with producers reducing activity as profit margins collapse, a first sign of the demand destruction that may spread to other sectors.
