by Nick Cunningham
Oil prices fell again on Monday after last week’s rout following the Brexit vote, deepening the losses and killing off a multi-month oil price rally.
There is quite a bit of debate around how lasting the negative effects of the Brexit result will be for crude oil. On the one hand, there has been no change to the physical oil market. The global economy continues to hum along, albeit at an unimpressive pace. Billions of people continue to fuel up their cars, factories continue to operate. In other words, not much has changed.
Although the UK ranks as a top five global economy, a Brexit won’t materially affect the supply/demand balance for crude oil, even if a withdrawal from Europe turns out to be hugely negative for economic growth. Goldman Sachs looks at the numbers: