Prices hang on the outcome of the OPEC+ meeting

Despite the apparent conviction of US President Trump, much uncertainty remains over whether Saudi Arabia and Russia will manage to strike a deal in today’s OPEC+ meeting. Our best guess is that the two sides will agree to an output cut of around 10-15m bpd. But it seems likely that a deal would be conditional on other major producers – particularly the US and Canada – agreeing to shoulder some of the burden of these output constraints, which could prove to be the spanner in the works. If such a condition is attached, it will form the basis of the discussion at the G20 energy ministers meeting on Friday. Turning to next week, investors will look for signs in China’s monthly trade and activity data that the recovery there is gaining momentum. But the data are likely to be underwhelming: domestic demand remains weak and the growing pandemic outside China has dealt a heavy blow to its export sector. In any case, we think that – until it appears that the pandemic is being contained at a global level – the spread of the virus will continue to be the key driver of prices in commodity markets.