Oil prices received a shot in the arm following Friday’s assassination of Qassem Soleimani, a top ranking Iranian general. Regardless of geopolitical events, we expect constrained supply growth and a modest pick-up in demand to push oil prices higher in 2020. Metals prices trended sideways this week, despite strong Chinese PMI data. While we expect Chinese steel and iron ore prices to remain subdued over the course of 2020, we think it’s just a matter of time before non-ferrous metals begin to turn a corner.
Next week, the fall-out from today’s drone strike should become clearer. As such, the focus will remain on the Middle East and the tensions between the US and Iran. Otherwise, markets will probably take direction from the US employment report on Friday, which we expect to post a gain of 150,000. Looking ahead, we suspect that US jobs growth will remain solid throughout 2020, which should provide a lift to oil prices.
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