Most commodity prices increased this week, with the prices of agricultural commodities rising particularly strongly. The prices of corn, soybeans and wheat surged, reaching new multi-year highs on the back of adverse weather in the US and Brazil. In contrast, oil prices fell back as the demand outlook in Asia deteriorated. However, assuming that the latest virus outbreaks are contained before too long, we remain relatively optimistic on the global oil demand outlook, and expect prices to reverse course before long and rise in the months ahead.
Next week, key events include the OPEC+ meeting on Wednesday and the release of official PMI data from China on Friday. We don’t expect OPEC+ to make any major changes to production quotas given that oil prices are only slightly above their level at the previous meeting and the demand outlook appears broadly similar. Elsewhere, in China, the official manufacturing PMI for April is likely to tick up slightly. This may lend some additional near-term support to industrial metals prices, but we still expect prices to drop back in the coming quarters as stimulus is withdrawn in China.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services