Commodities Chart Pack (Dec. 24)

While Trump's plans to implement tariffs on Canada and Mexico and to raise energy production by 3mn barrels of oil equivalent per day have grabbed headlines, we're doubtful that either will have a major bearing on the oil market next year. After all, we're skeptical that tariffs affecting the oil sector will see the light of day and any impact in the short term would be limited. Meanwhile, the decision to raise output will ultimately rest with private producers who have exercised greater capital discipline since the pandemic and will be conscious of the environment of feeble demand growth. With OPEC+ set to raise output in 2025, we think the oil market will be finely balanced and prices may only fall a little next year from current levels. The major wildcard will be whether Trump's foreign policy stance adds to geopolitical risks stemming from conflict in the Middle East.