Macro Oils short-term outlook January 2020

The targeted killing on 3 January 2020 of Iran’s head of the Islamic Revolutionary Guard Corp Qasim al Soleimani, along with others, and the follow up threats from President Trump and Iran briefly lifted oil prices to above $70 per barrel for Brent. The Iranian attack on US-Iraq military bases in Iraq on 8 January again lifted oil prices above $70 per barrel but that did not last long either. Prices will remain subject to volatility as threats ebb and flow. In this monthly update, we outline our assumptions in order to chart a base case price view in a high risk environment. Highlights include the following: • Setting aside the US-Iran tensions, the outlook for 2020 shows oversupply • OPEC spare capacity provides little cushion in volatile environment • Downward risk to Iraq’s supply • IMO helps lift demand this year The January Monthly Update features an Executive Summary report and the usual related data download. The slide pack will resume with the early February report.