Coronavirus: OPEC Divided On How To Combat Oil Prices Slump
Nigeria’s Minister of State for Petroleum Resources Timipre Sylva arrives for the 178th Organization of Petroleum Exporting Countries meeting in Vienna, Austria, on March 5, 2020. ALEX HALADA / AFPMinisters from the OPEC group of oil-producing countries started meeting in Vienna Thursday to try to overcome their divisions on how to react to the fall in oil prices in the wake of the novel coronavirus epidemic.
The effects of the virus on global demand — particularly in worst-hit China — has blown a hole through the group’s attempt to support prices at its last meeting in December by agreeing on production cuts of 500,000 barrels per day. “An agreement to reduce the OPEC+ group output level by at least one million barrels per day is imperative; otherwise oil prices will re-visit the recent lows and possibly break below them,” said analyst Tamas Varga of PVM Oil Associates.
“Economic activity and oil demand is now collapsing around the world… If Russia does not step up now then what role does it really play in OPEC+?” said Bjarne Schieldrop, a commodities analyst at SEB bank said.Aside from bridging their differences on the effect of the virus on the market, the assembled officials are also having to accommodate changes to their routines in Vienna.
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