Oil prices plunge as Russia refuses to play ball

Oil prices closed below $50 per barrel this week for the first time in two years as Russia refused to rollover or deepen OPEC+ output cuts at the latest meeting with OPEC in Vienna. As a result, we will be revising our supply and price forecasts in a forthcoming Update on Monday. The lack of a deal also puts into question OPEC’s own authority and the future of OPEC+. In contrast, gold and silver prices surged as the Fed dramatically and unexpectedly cut interest rates by 50bp in light of the economic disruption associated with the coronavirus. The virus is also likely to prompt further policy loosening elsewhere and, as a result, we have raised our end-2020 gold price forecast. Turning to next week, the virus will once again be the main focus of the market’s attention, especially as data releases will typically still refer to the period before the virus took hold.