Riyadh — Saudi energy minister Prince Abdulaziz bin Salman on Tuesday said he has confidence in OPEC+ and Russia, which is leading the non-OPEC members in the alliance, as Moscow is positively engaged in discussions despite differences between the two oil producers over further output cuts.
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"We still communicate with Russia,” Abdulaziz told reporters in Riyadh.
Russian energy minister Alexander Novak "is positively engaged in talks,” he added.
On February 7, an advisory committee of delegates co-chaired by Saudi Arabia and Russia recommended an additional cut of 600,000 b/d for the second quarter, but Russia is not fully convinced of the need for such measures, citing the uncertainties of demand forecasts.
The 23-country OPEC+ coalition is set to meet March 5-6 in Vienna to decide on the future of their current 1.7 million b/d production cut, with Saudi Arabia having lobbied to deepen the cut to offset the expected demand hit from the spread of COVID-19.
ICE Brent April futures, which plunged 4% on Monday on fears over the growing global spread of the virus, were trading nearly unchanged at $55.75/b at 1022 GMT Tuesday. NYMEX April WTI was also more or less unchanged at $51.37/b after a similar fall on Monday.
Panic selling on Monday was prompted by the surge in COVID-19 cases in Iran, South Korea and Italy, stoking fears that the outbreak could become a pandemic.
The World Health Organization warned Monday that while the outbreak did not yet warrant being classed as a pandemic, it had "pandemic potential."
"Not only is the negative economic fallout of the coronavirus epidemic spreading into the developed economies, but the risk is also rising that it will impact growth in the affected economies also in the second quarter of 2020," Julius Baer economists said in a note on Tuesday.
"Furthermore, going forward, we expect the economic figures to show a much more pronounced drag from the coronavirus in Europe than in the US. Europe is more dependent on the global economy than the US, in particular with regard to the economic dynamics in China.”