No Opec decision yet on output cuts

RIYADH: The Organization of Petroleum Exporting Countries hasn’t decided yet to extend or modify its agreement to cut oil output, Saudi Arabia’s energy minister said, as the coronavirus batters the global economy and threatens demand for crude.

Opec and its allies are to meet next week in Vienna to assess their global cuts policy.

“I’m confident of Opec’s partnership with other producers including Russia,’’ Energy Minister Prince Abdulaziz bin Salman told reporters in Riyadh yesterday.

“We are communicating with each other at every opportunity,” he said, before addressing an industry conference in the Saudi capital. “The Opec secretary-general is attending this conference, and we just had a chat.

We did not run out of ideas.”

Brent crude jumped as much as 68 cents a barrel, or 1.2%, before surrendering gains. The benchmark contract was eight cents lower at $56.22 a barrel at 9.34 a.m. in London. Brent has slumped 15% this year.

Global oil demand will drop this quarter for the first time in over a decade as the outbreak of the coronavirus batters China’s economy, creating a significant supply surplus, according to the International Energy Agency.

The United States, Japan and Hong Kong have issued travel warnings for South Korea, the worst-affected country after China, while Italy, the outbreak’s epicenter in Europe, might seek flexibility on some budget targets.

Russia hasn’t said whether it will support a proposal by the coalition known as Opec+ for deeper production cuts of 600,000 barrels a day.

“Russia’s Energy Minister Alexander Novak is positively engaged with Saudi Arabia — Opec’s biggest producer — and other suppliers,’’ Prince Abdulaziz said.

Opec+ members already agreed in December to withhold 1.2 million barrels a day from the market.

An additional cut of 600,000 barrels would amount to more than 2% of Opec’s January production, data compiled by Bloomberg show.

Opec secretary-general Mohammad Barkindo, speaking at the conference, said the world’s “thirst for energy will continue to grow in spite of the coronavirus.’’