Macro Oils short-term outlook February 2020 Report

Commodity Market Report 05 February 2020

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Report summary

The near-term impact of the coronavirus outbreak on oil demand remains uncertain as much depends upon when and how China’s manufacturing industry restarts after the extended Lunar New Year public holiday. We have lowered our oil demand forecast for Q1 2020 by nearly 900,000 b/d to 98.8 million b/d. Much of the drop is attributable to efforts to contain the outbreak, including flight cancellations. As a result of the Q1 2020 collapse in demand growth, we made a significant change to the price forecast for the quarter. Downside risk to demand continues. In this Monthly Update, we examine Our latest detailed adjustments to China and global oil demand in view of the coronavirus impact How OPEC+ is responding to the downward price pressure A global surplus in Q1 2020 despite constraints in Libya’s exports Seesaw in non-OPEC supply growth from 2.4 million b/d in 2020 to just 0.6 million b/d in 2021

Global supply: OPEC production outages increase, but non-OPEC growth strengthening
Non-OPEC: growth finely poised between US Lower 48 and other non-OPEC
OPEC: Libyan oil port blockades remove significant volumes
Global liquids demand: a considerable downside revision focuses on Q1 2020, following escalation of the new coronavirus outbreak