Opec+ mulling further 500,000 bpd output cut

LONDON: The Organization of the Petroleum Exporting Countries (Opec) and its allies are considering cutting their oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus, two Opec sources and a third industry source familiar with discussions said.

Opec and allies including Russia, known as Opec+, are considering holding a ministerial meeting on Feb 14-15, one of the Opec sources said, earlier than a current schedule for a meeting in March.

An Opec and non-Opec panel called the Joint Technical Committee has scheduled a meeting for Feb 4-5 in Vienna to assess the impact of the virus on demand, other Opec+ sources said.

The technical panel is likely to make a recommendation on any further action to support the market, the sources said.

Opec+ has been reducing oil supply to support prices, agreeing in December to cut output by 1.7 million bpd until the end of March. Its next meeting is scheduled for March 5-6.

Oil has fallen US$10 a barrel this year to around US$56 (RM230), lower than the level many Opec members need to balance their budgets.

Saudi Arabia's economy, the largest in the Arab world, remains dominated by hydrocarbon revenue despite plans to diversify. The kingdom needs prices of around US$80 to balance its state budget.

Meanwhile, oil prices were little changed yesterday.

Brent crude was down 14 cents at US$56.48 a barrel by 1054 GMT, having earlier lost more than US$1 to its lowest since January last year at US$55.42.

US West Texas Intermediate crude rose 20 cents to US$51.76 after hitting a session low of US$50.42, also the lowest since January last year. – Reuters