Oil prices rallied for a third consecutive day yesterday, with ICE Brent trading close to US$64/bbl. The prompt ICE Brent timepsread has also strengthened through January amid growing supply risks, ING's commodity experts Ewa Manthey and Warren Patterson note.

Iran unrest and Kazakh outages lift oil prices

"The price increase comes amid intensifying protests in Iran, raising the possibility of some form of intervention by the US. There have been suggestions of the potential for US military action. Up until now, President Trump has said the US will impose a 25% tariff on any country “doing business” with Iran. China is a key buyer of Iranian Oil. Whether this secondary tariff threat is sufficient to push China away from Iranian Oil remains to be seen."

"Previously, the threat of secondary tariffs from buying Venezuelan and Russian Oil was not enough to persuade China to halt purchases of Oil from these countries. In addition, with the US and China having come to a trade truce, we question whether the US would want to rock the boat once again with additional tariffs on China."

"Exports of Kazakh Oil from the CPC terminal will come under significant pressure this month. Shipments are expected to come in between 800-900k b/d, around 45% below initial expectations, according to Bloomberg. The drop is due to maintenance and damage caused by Ukrainian drones, while weather has also been an issue."