Oil to tread water ahead of OPEC+ meeting

Most commodity prices rose this week, buoyed by news of further progress on COVID-19 vaccines. A rapid roll out of an effective vaccine suggests that economic activity, particularly in the US and EU, would be stronger than otherwise, which is positive news for most industrial commodities. We expect the oil market to be fairly quiet next week ahead of the OPEC and OPEC+ meetings on 30^th November and 1^st December, respectively. We think OPEC+ will decide to extend its current output cut until end-March 2021, at least, given that demand will probably remain weak in the first quarter. Any boost to consumption from widespread vaccination is only likely to be felt later in the year. Accordingly, we would expect oil prices to fall back sharply if it looks as though OPEC+ will stick to its original plan to raise output by 2m bpd in January 2021.