OPEC members and their allies are having phone conversations about the slide in oil prices and whether to bring forward next month’s ministerial meeting, although no firm decision has been taken yet, a Gulf oil official told Al Arabiya English.
Oil prices have fallen far below the $60 threshold as the coronavirus epidemic, also known as corona, has significantly pressured oil prices due to worries of lower demand from China, the world’s largest oil importer. With many airlines, including Etihad and British Airways cancelling flights, the demand shock to markets has been considerable.
“Discussions are going on about the meeting but there has been no decision as [of] yet,” the official said.
OPEC policymakers have responded with calls for calm. Last week, the UAE Minister of Energy Suhail al-Mazroui on Monday urged markets not to overreact to the possible impact of the coronavirus on oil demand.
In his statement, al-Mazroui added that he is confident in the ability of China and the international community to bring the outbreak under control.
Hussein Sayed, chief market strategist at online trading platform FXTM, said “China’s demand for oil is expected to have dropped by three million barrels a day, which is 1.3 million barrels more than OPEC’s combined output cuts. Add to this a global cancelation of airline flights to China, and you get an extremely oversupplied market.”
In response to the coronavirus, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, may meet later this month, bringing forward the planned meeting for March.
The OPEC and non-OPEC’s Joint Technical Committee (JTC) is set to meet on Tuesday this week to discuss the current impact the coronavirus has had on oil demand, a source close to the group told AFP.
The meeting will come after OPEC reported a plunge in oil output in January to a multi-year low as countries over-complied with a supply-cut agreement and Libya’s oilfields closed. OPEC has managed to keep world markets relatively stable, between $50 and $75 a barrel, for the past three years through its agreement for members and non-members, led by Russia, to cut supply and support markets.