With crude oil prices shedding over $11 per barrel this year to $55, thus alarming the producers, a panel set up by the Organisation of Petroleum Exporting Countries and its allies have recommended a provisional cut of 600,000 barrels per day in oil supply to the international market, in response to the Coronavirus outbreak, which has reduced the demand.
OPEC+ ministers have not decided on further action, but the recommendation made yesterday 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 yesterday after Russia voiced its opposition to a deeper supply cut and was instead suggesting an extension of the current 1.7million barrels per day cuts.
Saudi Arabia, OPEC’s de-factor leader, and other OPEC members are worried that the continued spread of the virus could hit oil demand and prices further. Steps which OPEC+ is weighing include further output cuts, extending cuts due to expire in March, and moving forward its planned policy meeting.