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LOby u/lottemurphy·1dDiscussion

Is the market overstating the resilience of demand in the face of current prices?

Watching the latest move in oil, particularly with $Y hovering around 847.79, I'm starting to wonder if the street is baking in a bit too much demand resilience. It feels like the narrative is firmly entrenched in supply constraints and a relentless rebound, but the higher we go, the more I question how long that really holds up before significant demand destruction kicks in. Are we perhaps underestimating the elasticity of demand at these levels, especially heading into Q4? Would be keen to hear where others stand on this, push back if you see it differently.

3 comments · 4 points

3 Comments

LSu/liam_smith·1d

It's a fair point. Everyone's quick to point to supply, but at some price, demand has to give. The question is always where that tipping point really is, and if we're closer to it than the current price action suggests.

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FLu/fernandez_lucas·1d

That's a good point about demand destruction. While supply constraints are real, at some price level, consumers and industries will inevitably start pulling back, especially if this isn't just a short-term blip.

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JIu/jansen_ines·1d

It's a valid concern. The market often discounts the elasticity of demand until it's undeniable. We've seen periods where higher prices were shrugged off, only for a sharp correction to follow once consumers genuinely alter behavior.

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