AMERICAS OIL: Strong Jan Rally Pauses Ahead of Trump’s Inauguration
Strong Jan Rally Pauses Ahead of Trump’s Inauguration: Saxo Bank Commodities Weekly
• The bank notes a broad commodities rally continued this week, before some profit-taking emerged ahead of Monday’s inauguration speech.
• The Bloomberg Commodity Index reached a 25-month high with all three sectors showing gains.
• In their recently published Q1 2025 outlook, Saxo paints a broadly bullish outlook for commodities.
• Much focus is on energy, given strong winter demand at a time when supply from Russia is facing challenges amid increased sanctions.
• Their main commodities forecasts are generally geared toward higher prices with crude oil staying mostly rangebound within a $65-$85 range. The short-term risk is skewed to the upside.
• While the strong start to January has brought us close to the upper targets, it is too early to make revisions given elevated near-term uncertainty. There may also have been commodity hoarding ahead of potential tariffs, highlighting a risk that the demand seen has not been driven by real end user demand.