--- title: "Goldman Sachs: Upward Pressure on Oil Prices May Last Longer Than Expected; CTA Ammunition Depleted as Downside Risks to Equities Accumulate" type: "News" locale: "en" url: "https://longbridge.com/en/news/284462498.md" description: "Rich Privorotsky, Head of Delta-One at Goldman Sachs, warns that stalled Iran nuclear talks could make upward pressure on oil prices more persistent than market expectations. The long-side ammunition for trend-following strategies (CTAs) is nearly exhausted, with volatility control strategies currently serving as a key source of buying support. However, if the market breaks below the negative Gamma range, both CTAs and volatility control strategies will sell in unison" datetime: "2026-04-28T23:34:18.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284462498.md) - [en](https://longbridge.com/en/news/284462498.md) - [zh-HK](https://longbridge.com/zh-HK/news/284462498.md) --- # Goldman Sachs: Upward Pressure on Oil Prices May Last Longer Than Expected; CTA Ammunition Depleted as Downside Risks to Equities Accumulate Rising oil prices combined with geopolitical stalemates are sending signals of systemic pressure to global financial markets—pressure that has been ignored by equities but is becoming increasingly unavoidable. Rich Privorotsky, Head of Delta-One at Goldman Sachs, warns that **the long-side ammunition for trend-following funds (CTAs) is nearly exhausted, presenting clear asymmetric downside risks from a technical perspective; meanwhile, stalled Iran nuclear talks suggest that upward pressure on oil prices may persist longer than the market expects.** Even if the situation in Iran is resolved quickly, the impact on refined product prices is expected to last until year-end. **Oil prices have approached recent highs again, yet the stock market currently ignores this.** The key risk in the current situation lies in the market pricing it as a temporary shock. If the stalemate continues, the macroeconomic impact will accumulate in a compounding manner rather than dissipate naturally. At the same time, expectations regarding the sustainability of AI spending are shaking. Reports indicate that OpenAI failed to meet its revenue targets, and SoftBank Group plunged more than 10% in a single day, impacting the previously high-confidence optimism in the market regarding tech capital expenditures. **As hyperscale cloud providers release their earnings reports this week, return on investment (ROI) will replace the scale of capital expenditure as the focal point of market debate.** ## **Iran Situation: Stalemate in Talks May Extend Oil Market Pressure Through Year-End** The structural vulnerability of Iran's oil system is becoming an implicit variable in market pricing. Macro hedge fund manager Hugh Hendry offers profound insight into this: Iran's oil system is a flow system, not designed for stoppages. Crude oil must flow continuously from underground reservoirs to port tankers and then to Asian buyers. Once this chain is interrupted, the consequences are not only billions of dollars in lost revenue but also physical, irreversible damage. After wellheads stop pumping, formation pressure drops rapidly, and heavy asphaltene components clog rock pores, causing permanent damage to the reservoir and **permanent loss of production capacity.** This means that the longer negotiations drag on, the more Iran is effectively paying for its strategic persistence with its core assets. Currently, relevant shipping restrictions and natural gas pipeline controls remain in effect, with both sides believing they are in a favorable position, which precisely extends the duration of the stalemate equilibrium. Rich Privorotsky points out that **the market's current pricing logic still treats the Iran situation as a temporary shock, but if the stalemate persists, the transmission to product prices will amplify non-linearly over time. Continued rises in oil prices will exert pressure on interest rate markets through nominal inflation channels, thereby posing deeper challenges to equity valuations.** RBOB gasoline futures (XBA) have hit new highs. Without export restrictions, US retail gasoline prices would move toward $5 per gallon. ## **CTA Ammunition Depleted, Technicals Show Asymmetric Downside Risk** From a technical perspective, market fragility is accumulating. Rich Privorotsky explicitly states that **"CTAs have fired all their bullets,"** with asymmetric risks pointing downward. The last significant source of buying support in the market is currently volatility control strategy funds (Vol Control). The S&P 500 Index is currently pinned by local option Gamma effects, suppressing realized volatility, which in turn continues to provide buying support for volatility control strategies. **SpotGamma has raised the risk hub to 7,090, a level that constitutes key support; resistance above lies at 7,200.** Notably, although equities remain at high levels, the MOVE Index (measuring expected interest rate volatility) has stabilized at levels far above previous lows, and the VIX shows similar characteristics. Bulls may interpret this as a brief reflection of the oil price premium, but historically, this combination **often signals that deeper pressures have yet to be released.** Furthermore, as quiet period windows gradually close, **IPO supply is accelerating, bringing marginal pressure to market liquidity.** Month-end rebalancing is also on the horizon, with equity-bond yield spreads continuing to widen, potentially forcing passive portfolio adjustments by asset allocation institutions. The concentrated release of Mag 6 earnings this weekend, combined with month-end capital flows, suggests market movements may be more complex than the current calm surface of prices implies. ## **Diverging Interest Rate Signals Strengthen Expectations for Fed Hold** Interest rate markets are sending signals distinctly different from those of the stock market. Rich Privorotsky points out that this divergence warrants close attention. **Global interest rates are under pressure:** The Bank of Japan maintained a hawkish stance with a split 6-3 vote, leading to a bear-flattening of the Japanese government bond yield curve; Australian government bond yields returned above 5%, and UK 50-year government bond yields also saw breakthrough increases. From a structural logic perspective, rising oil prices push up nominal inflation, the AI and capital expenditure cycle supports nominal GDP, and the US fiscal deficit running at 5% to 7% of GDP continues to create supply pressure for Treasury bonds. These three factors jointly form the underlying support for rising interest rates. Regarding the monetary policy path, if the Federal Reserve adopts what Rich Privorotsky calls a "Walsh-style" reaction function (focusing on trimmed inflation metrics and being more cautious about rate cuts), then **policy rates will effectively remain on hold** amid the accumulation of multiple pressures. The tail in last week's auction of 5-year US Treasury notes also confirmed market concerns about the capacity to absorb supply. Regarding gold, Rich Privorotsky expressed a structural bullish view on gold as a hedge against the loss of control over government balance sheets. However, cash shortages triggered by high oil prices have led to "piggy bank"\-style selling of gold in emerging markets. **For gold to truly begin functioning as a safe haven, oil prices need to stabilize first.** ## **AI Spending Narrative Under Pressure, ROI Becomes New Focus** Another important variable facing global asset prices this week comes from the reassessment of the AI narrative. Rich Privorotsky points out that the phase of high confidence in capital expenditures by hyperscale cloud providers may be coming to an end, with market focus shifting toward return on investment. Reports indicate that OpenAI failed to meet its established revenue targets, casting doubt on the entire logic of hyperscale computing investment. SoftBank Group's stock price plummeted more than 10% in a single day, further exacerbating market concerns about the sustainability of AI spending. Rich Privorotsky also noted that the more revealing breakthrough in the first quarter was not that models themselves became smarter, but rather the evolution at the level of compute orchestration—integrating GPU compute power with CPUs, memory, and scheduling systems significantly enhanced practical value. **This trend has spawned "AI beneficiary stocks" in new niche sectors such as photonics and CPUs, further expanding the scope of benefits from the AI theme.** Even if spending expectations for some cloud providers loosen, the market retains a strong tendency to buy the dip on corrections in this vertical sector, but attitudes may be more cautious regarding direct beneficiaries on the capital expenditure side. Earnings reports from downstream supply chains this week have already shown strong performance with record-breaking demand and pricing; statements from hyperscale cloud providers will determine whether this optimistic tone can be validated by upstream capital. ### Related Stocks - [OXY.US](https://longbridge.com/en/quote/OXY.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [9984.JP](https://longbridge.com/en/quote/9984.JP.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [.VIX.US](https://longbridge.com/en/quote/.VIX.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) ## Related News & Research - [GLOBAL MARKETS-Oil prices hit $110 while stocks waver on Iran impasse](https://longbridge.com/en/news/284344885.md) - [Trump Says He Has 'All The Cards' As Iran Talks Halt: Brent Crude Jumps To $107, Dow Futures Slip 52 Points](https://longbridge.com/en/news/284152025.md) - [GLOBAL MARKETS-Oil jumps, stock futures slip as US-Iran talks stall](https://longbridge.com/en/news/284130855.md) - [US oil executives expect crude output to rise as Iran war continues, survey shows](https://longbridge.com/en/news/283864311.md) - [US pump prices near 4 year high on Iran war disruption, refinery outages](https://longbridge.com/en/news/284421919.md)