OPEC+ unlikely to spring a surprise

All eyes in the oil market will be on the OPEC and OPEC+ meetings on Monday and Tuesday next week. Given the renewed imposition of virus-related restrictions in Western economies, the near-term prospects for oil demand have deteriorated. Accordingly, we expect that OPEC+ will decide to roll over its current 7.7m bpd production cut at least until end-March 2021. However, we suspect that this view is largely priced into the market. As a result, only a larger or longer production cut would give a meaningful boost to prices. Elsewhere, China’s November PMI readings will be released early in the week. We think the manufacturing data are likely to show a small rise and while the construction PMI may ease back, it will be from a very elevated level. All in all, the data are likely to support the ongoing rally in industrial metal prices.