Vienna — Key oil producing countries led by Saudi Arabia and Russia appear set to implement 600,000 b/d of new production cuts for three months starting in March to counter the demand destruction caused by the coronavirus outbreak, according to a delegate involved in the talks.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
That would apparently be on top of their existing 1.7 million b/d output cut accord that began in January and expires at the end of March. WTI oil rose 1% to $51.25/b after the news at 10:41 a.m. GMT time.
Any deal would require unanimous approval of all 23 ministers in the OPEC+ coalition, composed of OPEC, Russia and nine other allies. Their next scheduled meeting is March 5-6 in Vienna but delegates have said it could be moved forward.
The coronavirus has sparked fears of a major economic slowdown in China, the world's largest importer of crude, where quarantines and travel restrictions have caused a contraction in oil consumption. China sources some 70% of its crude imports from OPEC+ members, and its refineries are expected to slash runs by about 1 million b/d in February, according to S&P Global Platts Analytics.
Delegates were called to a hastily arranged technical committee meeting this week, which included extensive reviews of several scenarios attempting to quantify the uncertain oil market impact of the still-spreading virus.