MOSCOW (Reuters) - Russia is ready to bring forward a meeting of OPEC and its allies to February from March to address a possible hit to global oil demand from coronavirus, Russia’s energy minister said on Friday.
Alexander Novak said he was in discussions with OPEC leader Saudi Arabia and added that the oil-producing nations would need several more days to assess the impact and decide on the date of the meeting.
A coronavirus outbreak in China could cut oil demand by more than 250,000 barrels per day (bpd) in the first quarter of this year and drag on oil prices already beleaguered by oversupply, analysts and traders say.
“We can meet earlier, this is not a problem at all,” Novak was quoted by Russian agency RIA as saying.
“We have discussed it with the Saudi (energy) minister several times already ... Yesterday, we spoke for an hour, today for half an hour. We are discussing it very seriously,” Interfax quoted Novak as saying.
“In principle, we are ready to quickly react to such things. We need to assess the situation and continue to monitor for a few more days,” he was quoted by Interfax while adding it was too early to say if Russia was prepared to deepen output cuts.
Worries over the economic impact of China’s coronavirus have rattled global markets, helping send the price of crude down to around $58 a barrel from above $65 a barrel on Jan. 20. [O/R]
Russia reported its first two cases of coronavirus on Friday and restricted direct flights to China, its biggest trade partner.
OPEC+, which includes non-member countries such as Russia, has been reducing oil supply to support prices, agreeing in December to cut output by 1.7 million barrels per day (bpd) until the end of March.
The next meeting was scheduled for March 5-6.
OPEC wants to extend current oil output cuts until at least June from March, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of the coronavirus, OPEC sources told Reuters on Tuesday. (nL8N29X4RY)
Saudi Arabia’s economy, the largest in the Arab world, remains dominated by hydrocarbon revenues despite plans to diversify. The kingdom needs prices of around $80 per barrel to balance its state budget.
Reporting by Maria Tsvetkova and Alexander Marrow, Writing by Dmitry Zhdannikov; editing by Louise Heavens