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Oil Market Snapshot – January 2020

  • After a spike to c. $70/bbl in the wake of the assassination of Iranian General Qassim Soleimani, Brent has collapsed to $60.15/bbl on expectations of weaker demand due to the coronavirus outbreak
  • A muted reaction to the first phase of the US-China trade deal and weaker growth expectations from the IMF have also added downward pressure
  • Our global demand growth forecasts are trimmed to 970,000 b/d (-10,000 b/d m-o-m) for 2019 and 1.22 million b/d (-200,000 b/d) for 2020
  • Our global supply growth forecast for 2019 is revised down to 220,000 b/d (-80,000 b/d on previous), and 1.28 million b/d in 2020 (-550,000 b/d on previous) on major OPEC outages
  • We see Brent averaging $65.85/bbl in 2020 and $66.64/bbl in 2021 (+$2.21 on previous, and new forecast, respectively), though there is downside risk if the outbreak is not adequately contained
  • OPEC laggards Iraq and Nigeria improved compliance in December, but not through choice, with the former’s civil unrest intensifying while the latter was hampered by maintenance
  • Libyan production may be all but wiped out as forces led by General Haftar blockade ports and fiel...

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by Graham Walker // 29 January, 2020

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