OPEC now seeks 1.5 million b/d deeper production cut with allies for 2020: sources

With oil prices tumbling, OPEC now wants to deepen its production cuts with non-OPEC allies by 1.5 million b/d for the full year 2020, instead of just the second quarter, sources said Thursday.

The plan, aimed at combating the demand destruction caused by the coronavirus epidemic, would see OPEC assume 1 million b/d of the cuts and non-OPEC producers take on 500,000 b/d. That would be on top of the alliance's existing 1.7 million b/d in supply curbs.

A previous proposal unveiled earlier Thursday called only for the deeper cuts through June.

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"The consultations, monitoring and constant review undertaken of current market conditions demonstrate the strong commitment of OPEC member countries to work together to restore oil market stability," OPEC said in a statement following ministers' consultations in the evening. "Declaration of Cooperation members are determined to jointly rise to meet the current pressing challenge."

Front-month ICE Brent futures fell 2.39% to $49.91/b at 1900 GMT, with the selloff having started at around 1500 GMT.

Convincing Russia to get on board may be a challenge, with Energy Minister Alexander Novak having told OPEC in Vienna Wednesday that he would not support deeper supply curbs, before returning to Moscow for consultations with President Vladimir Putin.

Novak is scheduled to return to the Austrian capital for talks with OPEC Friday morning, along with nine other non-OPEC partners.

Several OPEC delegates told S&P Global Platts that they were already expecting a day of difficult talks.

"They'll probably be in there for hours," one said before the latest proposal was revealed.