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An OPEC+ technical committee may reach consensus on Thursday on the need to cut oil output by at least a further 500.000 barrels per day in response to the coronavirus’ impact on energy demand and global economic growth. two sources told Reuters.
The Joint Technical Committee (JTC) is not a decision-making body but does advise the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia. a grouping known as OPEC+.
OPEC+ ministers have not decided on further action. but a recommendation by all the members of the JTC. which includes Saudi Arabia and Russia. would signal progress towards a decision.
The JTC panel extended its meeting into a third day on Thursday after Russia voiced its opposition to a deeper supply cut and was instead suggesting an extension of current cuts.
In past years. Russia has regularly signaled opposition to OPEC before ultimately agreeing on policy during formal meetings.
Oil prices have fallen by more than $11 a barrel this year to $55. alarming producers.
Steps which OPEC+ is weighing include further output cuts. extending cuts due to expire in March. and moving up a planned policy meeting to February from March 5-6.
OPEC sources said the OPEC+ meeting was unlikely to be brought forward unless there was general agreement on the need to reduce output further.
OPEC+ is currently curbing output by 1.7 million bpd.
While OPEC countries such as Iraq. OPEC’s second-largest producer. have voiced support for any agreement that would stabilize the market. Russian Energy Minister Alexander Novak said on Tuesday he could not say for sure whether it was time to tighten output further.
The economic slowdown resulting from the virus outbreak is expected to reduce 2020 global demand growth by 300.000-500.000 bpd. or roughly 0.5%. BP Chief Financial Officer Brian Gilvary said on Tuesday.
Oil futures rose for a second day on Thursday amid investor optimism over unconfirmed media reports of possible advances in combating the coronavirus outbreak in China.
