The price of oil plunged again this week but, while we are negative on the outlook for 2019, we think that the latest falls are being driven more by bearish investor sentiment than fundamentals. After all, OPEC+ appears to be serious about its output cuts, announcing this week that it will publish individual country quotas. That said, this additional effort to boost confidence in the cuts reeks a little of desperation in the face of collapsing prices.
Elsewhere, most other commodity markets are ending 2018 on a subdued note, primarily reflecting concerns about global growth prospects in 2019. We share these concerns and, for the most part, expect prices to ease back next year.
The next Commodities Weekly Wrap will be published on Friday 4th January. We wish all our readers a Merry Christmas and a Happy New Year.
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