OPEC+ to discuss 'substantial' new output cuts at key meeting: Algerian minister

OPEC and its oil producer allies are planning to discuss a further "substantial" reduction in crude output in response to the coronavirus epidemic when they meet this week in Vienna, Algeria's state news agency APS reported energy minister Mohamed Arkab as saying Tuesday.

"We will examine the possibility of making a further substantial reduction in production by withdrawing from the market the quantities that are not consumed due to the spread of the coronavirus," Arkab said in an interview with APS.

OPEC+ ministers are meeting in Vienna on Thursday and Friday to decide on an appropriate response to the slide in oil prices over recent weeks caused by the coronavirus outbreak. The meeting had been scheduled before the virus outbreak in December as the current 1.7 million b/d production cuts by OPEC+ are due to expire at month's end.

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A delegate-level OPEC+ technical committee met Tuesday to review the latest market scenarios, having last month recommended 600,000 b/d in new production cuts to help reverse the oil price slide. But Saudi Arabia has been urging the alliance to extend the deal and tighten quotas by another 1 million b/d or more, according to people familiar with the negotiations.

"The trend is towards the continuation of the declines adopted in December 2019. We already have a consensus between the OPEC countries and No OPEC, including Russia, on this point, it is acquired," Arkab was quoted as saying. Arkab also currently holds the role of OPEC president.

"Each country will come with the ambition to seek a consensus to avoid the collapse of prices, no country has an interest in seeing very low prices."

S&P Global Platts Analytics downgraded its 2020 demand forecast by almost 500,000 b/d in mid-February and said the virus could reduce oil demand by more than 1 million b/d in February.

UAE energy minister Suhail al-Mazrouei told reporters in Vienna that the group was awaiting a full report by the technical committee before deciding on production policy. A nine-country ministerial monitoring committee, including Mazrouei, will gather Wednesday and likely make a formal recommendation.

"The situation on the market needs wisdom and needs wise decisions, and I am hopeful that this group of producers, they have never let us down," Mazrouei said. "People are putting so many expectations, but you need to be realistic of the situation and make the right measures, not to overreact, but we have to do things based on knowledge of the markets."