OPEC+’s announcement that it will continue to add oil to the market in July at a pace faster than they had planned a few months prior solidified a marked shift in the group’s output policy. This will lead to a large surplus developing in the oil market from H2 2025 onwards, especially if they continue to raise output at this rapid pace as we expect. We are forecasting the price of Brent to continue falling to $60pb and $50pb by end-2025 and end-2026, respectively.
Meanwhile, President Trump’s fresh tariff announcement, to increase tariffs on steel and aluminium from 25% to 50% is likely to keep US premiums for the metals high relative to other benchmarks. But as front-running fades, global goods trade is likely to slow which will be a headwind to industrial metal prices.
Note: we will be discussing oil, industrial metals tariffs, and more in an online briefing on Wednesday 4th June at 3pm BST. You can register here.
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