News of a record 9.7m bpd cut to output by OPEC and its allies failed to prop up oil prices, which fell again this week. As long as virus-containment measures continue to depress demand, we expect oil prices to remain low. By contrast, signs that activity is starting to recover in China was probably a factor boosting the prices of industrial metals. However, domestic demand in China remains below its pre-virus level and export demand will suffer given the lockdowns across much of the rest of the world. As a result, we are not expecting a sustained rally in industrial commodity prices any time soon.
Turning to next week, the spread of the virus and its negative implications for economic activity will continue to be the key driver of commodities prices. Flash Markit PMIs for the US and EU are scheduled to be published next week and will give us some indication of the scale of the downturn in activity.
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