Narratiive Tags - Khaleej Times Desktop
Local Business
Logo
 

OPEC+ considering further 500,000 bpd oil output cut

By Alex Lawler and Dmitry Zhdannikov/London
Filed on February 3, 2020
OPEC+ considering further 500,000 bpd oil output cut

Oil has dropped $10 a barrel in 2020 to $56 on demand worries

Opec and its allies are considering cutting their oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus, three Opec+ sources and a industry source familiar with the discussions said.

The Organisation of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, are considering holding a ministerial meeting on Feb. 14-15, one of the OPEC+ sources said, earlier than a current schedule for a meeting in March.

Oil has fallen $10 a barrel this year to $56, lower than the level many OPEC countries need to balance their budgets. The coronavirus outbreak in China could cut oil demand by more than 250,000 bpd in the first quarter, analysts and traders say.

OPEC member Iran said on Monday the spread of the virus had hit oil demand and called for an effort to stabilise prices, Iran's official news agency IRNA reported.

"The oil market is under pressure and prices have dropped to under $60 a barrel and efforts must be made to balance it," Iran's oil minister, Bijan Zanganeh, said.

The Wall Street Journal reported that another option being considered is a temporary cut of 1 million bpd by the Saudis to support the market. Reuters was not able to verify the report.

Russia on Friday said it was ready to bring forward the OPEC+ meetings to February. The country is the biggest non-OPEC producer working with OPEC so its approval is key.

An OPEC and non-OPEC panel called the Joint Technical Committee (JTC) has scheduled a meeting for Feb. 4-5 in Vienna to assess the impact of the virus on demand, other OPEC+ sources said.

The technical panel is likely to make a recommendation on any further action to support the market, the sources said.

OPEC+ has been reducing oil supply to support prices, agreeing in December to cut output by 1.7 million bpd until the end of March. Its next meeting is scheduled for March 5-6.

The partners are also discussing extending the duration of the cuts and separate OPEC sources said last week the group wanted to prolong the curbs until at least June.

Saudi Arabia's economy, the largest in the Arab world, remains dominated by hydrocarbon revenue despite plans to diversify. The kingdom needs prices of around $80 to balance its state budget. - Reuters


ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM Business
MORE FROM Khaleej Times
CurrentRequestUnmodified: /apps/pbcs.dll/article?avis=KT&date=20160801&category=ARTICLE&lopenr=160809931&Ref=AR&profile=1037 macro_action: article, macro_profile: , macro_adspot:
 
 
 
 
 
 
 
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios khaleejtimes - HUAWEI AppGallery