Saudi Arabia had urged other members in the alliance known as OPEC+ to meet in early to mid-February, as news of the coronavirus outbreak caused oil prices to plunge, but Russia, the key non-OPEC participant, balked. Ministers have been sent invitations with the March 5-6 dates, officials said.
"The Russian strategy was to delay for some clearer data that might mitigate the need for a cut," a source familiar with the deliberations told Platts. Front-month ICE Brent futures have rebounded 11% from their February 10 low to trade at $59.16/b as of 1719 GMT. But that is still down some 10% year to date and far below the level many OPEC members need for their budgets to balance.
Chinese oil demand has taken a hit from the coronavirus, with travel restrictions and quarantines in place, as the death toll continues to rise. OPEC's analysis arm last week revised downward its forecast of 2020 global oil demand growth by 230,000 b/d due to the outbreak, while the IEA was far more bearish, estimating a 365,000 b/d erosion of its previous demand growth projection.
A technical committee of OPEC+ delegates on February 7 recommended that the 23-country coalition deepen its existing 1.7 million b/d production cut accord by 600,000 b/d through the end of the Q2 to offset any demand impact from the infection. Russia has yet to endorse the plan, citing the uncertainties of demand forecasts, but delegates said it was possible different levels of cuts could be discussed when OPEC+ meets in Vienna.
Saudi energy minister Prince Abdulaziz bin Salman on Wednesday attended an international energy symposium in Riyadh, where he did not discuss the prospect of OPEC+ oil cuts, besides acknowledging that he had failed to convince Russia of the need to act immediately, according to sources involved in the discussions, who asked not to be named because it was a closed session.