It’s too soon to say whether the Iranian missile strikes on Israel are the start of a conflict that will eventually result in oil supply being affected or if oil prices will drop back as the heightened risk premium in prices gradually unwinds. For now, we are tentatively sticking with our forecast that Brent crude oil prices will fall to $70 per barrel by end-2025. In a similar vein, China’s recent stimulus announcements have sent industrial metals prices soaring but a surge in demand would require substantial fiscal support, details of which have not been announced. Even if policy support is stepped up, construction activity is still likely to fall by the end of the decade which will weigh heavily on metals prices. Over the next month, the US election looms large. While US oil and gas production is likely to remain elevated regardless of who wins, US oil consumption would probably be higher under Trump.
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