A committee appointed by the OPEC club of oil-producing countries and its allies to study the effects of coronavirus recommended additional output cuts on Saturday, Algeria’s energy minister said.
“The coronavirus epidemic has had a negative impact on economic activity, notably in transport, tourism, and industry, particularly in China,” Mohamed Arkab, who is also president of the conference of the Organization of the Petroleum Exporting Countries, said in a statement.
Delegates of OPEC and other oil producers including Russia – together known as OPEC+ – have been in a “joint technical committee” meeting in Vienna this week to discuss cutting production, amid fears of the coronavirus situation in oil consumer China affecting the market.
The new coronavirus has spread to more than 20 countries after emerging in December in China, where it has killed more than 400 people and infected 20,000.
As the world’s leading importer and consumer of oil, China is a key player in the market.
OPEC and its allies in December extended an existing agreement to curb crude oil production to prop up prices.
The joint technical committee “recommended extending until the end of 2020 the current production reduction agreement... and proceeding with an additional reduction in production until the end of the second quarter of 2020,” Arkab said.
Arkab added that he supported the conclusions of the committee, which would continue consultations among OPEC+ states to seek mutually agreeable solutions “to quickly stabilize the oil markets and face the current crisis.”
Crude prices have tumbled since the deadly outbreak in the world’s second-biggest economy. The US benchmark oil contract, WTI, has fallen by around 18 percent over the past month.