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These are unprecedented times for energy markets. Crude oil demand has crumbled as economic activity has been suspended around the world, and nearly 3 billion people stay at home to flatten the curve of contagion.

2019 oil prices were in line with our baseline scenario. OPEC is discussing whether to extend its production quota. U.S oil production will expand further, albeit at a slower pace.

OPEC+ will most likely extend the output deal through the rest of the year. Weaker economic growth to lead to slower demand for oil. Escalation of tensions between U.S. and Iran, as well as trade negotiations between China and the U.S. are the main sources of uncertainty.

Risk-off mood at the end of the week as increasing trade fears, volatility in oil prices and doubts about US economic growth weighed. The detention of a Chinese tech manager at the request of the US fuelled concerns about worsening relations. These events dispelled the positive mood after the G20 summit, in which China and the US reached a trade truce.

Financial markets seemed to recover on the back of positive news on Brexit negotiations, Italy’s budget plan and a rebound in oil prices. The Xi-Trump talks at the G-20 leaders’ meeting later this week will be key for investors.

With US having abandoned the nuclear agreement with Iran, oil prices have rebounded amid expectations of a tightening supply. Paradoxically, the higher prices caused concern in the OPEC and amongst its partners. Whilst it is true that higher crude oil prices would lead to a windfall, it would also damage demand from their buyers, including India, China and US.