(04 February 2020)DAILY MARKET BRIEF 2:OPEC experts meet to assess the impact of coronavirus on oil demand

Energy stocks (-1.34%) traded on the back foot as WTI crude dipped below $50 a barrel on worries that the coronavirus could curb the Chinese demand by 20%. Experts from OPEC+ will meet in Vienna today to assess the severity of the shock the coronavirus breakout may have on oil demand and decide whether a snap ministerial meeting would be necessary this month to increase production cuts to match the plunge in demand. Expectation that OPEC+ will react properly to the coronavirus shock will likely keep WTI crude bid near the $50 a barrel. But the upside potential could remain limited given the uncertainties regarding the magnitude of the shock on future demand and solid net long positioning in speculative trades.

BP announced 21% fall in its full-year net profit on cheaper oil, but that was better than analyst forecasts.

FTSE futures are 1.30% higher on the back of a recovery in oil, commodity prices and a cheaper pound. COMEX copper gained 2%.

Cable slipped below the 1.30 mark on Monday as trade talks between British and EU officials started rough, setting the tone for perhaps another rocky eleven months. But the 1.30 mark maintains its stickiness as traders remained on the long side of the trade into the construction and services PMI data due today and Wednesday respectively. The January construction PMI may show a significant rebound to 48.1 from 44.4 printed a month earlier.

The euro shortly dipped to 1.1035 but steadied near the 1.1060 mark against the US dollar.

Gold retraced below its 200-hour moving average ($1572 per oz) on improved risk sentiment. Recovery in risk assets could erase at least another $20 from the yellow metal within the next week.

By Ipek Ozkardeskaya