JP Morgan says rising oil prices could lead to demand destruction – headwind for stocks

<p>JP Morgan analysts on slower inflation – say that firms that benefited from the inflationary spike in the past two years may lose the power to charge higher prices for their goods and services, which is a headwind for their stocks and the equity markets in the remainder of 2023.</p><p>However, the analysts argue that rising energy inflation is likely to have the same impact:</p><ul><li>rising oil prices could lead to demand destruction, another headwind for corporates' pricing power</li></ul><p>More on the oil price from the note:</p><ul><li>only around 25% of the rise in the oil price is demand-driven </li><li>the larger portion of the spike is supply cutbacks by OPEC+</li><li>says that if oil sustains the rally companies might not be able to pass on rising input costs as easily as they did in the past two years, hitting margins</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.