Oil Is at $106. Goldman Can’t Keep Up. Budget Airlines Are Begging Washington for $2.5 Billion.
Market Snapshot
The Signal
Goldman Sachs raised its Brent crude price forecast again this week, now seeing $90 per barrel as the Q4 average. The problem: oil is already at $106. Goldman has now revised its forecast upward multiple times since the war began and keeps landing below where prices actually are. The market is outrunning every model. Meanwhile, Iran offered the US a proposal to reopen the Strait of Hormuz, briefly sending stocks higher and oil lower. But traders are not betting on it. Brent gave back the dip and climbed back above $106. The credibility of any Iran offer is zero until ships actually move through the strait again. And the damage is piling up in the real economy fast. Budget airline CEOs from Frontier, Avelo, and others met with Transportation Secretary Sean Duffy last week and formally requested a $2.5 billion government aid package. That figure represents exactly how much more they expect to spend on jet fuel this year if prices hold above $4 per gallon. Spirit Airlines, which filed for bankruptcy twice before the war, has now been delisted entirely. The low-cost carrier sector is collapsing in slow motion.
“We will see huge reductions in capacity, and more liquidations, if nothing is done. And that is bad for consumers.” (One Mile at a Time, on the budget airline crisis)
What To Watch
- →Big tech earnings this week. Meta, Microsoft, Apple, and Amazon all report. These four companies represent roughly 20% of the S&P 500. If they beat, the broader market holds. If they miss, nothing else matters.
- →Whether Iran’s Strait of Hormuz offer goes anywhere. Stocks moved on the headline but oil didn’t believe it. Watch tanker traffic data, not diplomatic statements, for the real signal.
- →Bank of England rate decision on April 30. With UK inflation at 3.3% and food and energy costs still rising, the BOE faces the same impossible choice as the Fed. A hold is expected, but any hawkish language moves bond markets across Europe immediately.
