OPEC+ panel gets no Russian agreement for deeper oil cuts

OPEC+ panel gets no Russian agreement for deeper oil cuts

West Texas Intermediate futures for April delivery added 65 cents, or 1.4%, to $47.43 a barrel on the New York Mercantile Exchange as of 10:16 a.m.in Singapore.

Iranian Oil Minister Bijan Zangeneh said at Thursday's meeting in Vienna that the cut would be for the second quarter of this year, and would be "subject to the acceptance" of non-OPEC allies, like Russian Federation, that have in recent years been coordinating cuts with the cartel.

The European benchmark, Brent crude, sank to under US$50 a barrel on Sunday, a level not breached since July 2017.

Wednesday's JMMC meeting is part of the process of drawing up recommendations for the wider meeting of ministers from OPEC on Thursday and a meeting of OPEC+ ministers on Friday.

"OPEC+ negotiations tomorrow are likely to be more contentious than today's meeting".

A statement by the OPEC Secretariat in Vienna, made available to journalists, said that the Conference took note of oil market developments since it last met in Vienna on 6 December, 2019 and reviewed the oil market outlook for the remainder of 2020. "So, I would imagine that Russian Federation certainly will be looking to work with OPEC and to participate in the deal but there is enormous reluctance amongst the oil companies, particularly, of course, Rosneft", he said.

OPEC members have agreed on the outlines of a deal for cutting 1.5 million barrels of crude oil in the second quarter of 2020.

It said two other sources confirmed talks were now focusing on additional cuts in excess of 1 million bpd. Siluanov did not say what Russia's decision in regard to deeper oil output cuts might be.

The splits on the way forward even within OPEC were on display on Wednesday as delegations arrived. "Given their history of co-operation with OPEC, we expect they will agree". The markets will remain volatile in the meantime as 2020 demand growth forecasts are slashed as factories close, flights cancelled and other business activities slow down globally.

Existing cuts have not been enough to counter the impact of the new coronavirus, Covid-19, on China, the world's biggest oil importer, and on the global economy.

Russia's oil exports to China were nearly unaffected last month amid the coronavirus outbreak as the East Asian country has been benefiting from lower oil prices and building its strategic oil reserves, Chris Weafer, founder of Macro-Advisory in Moscow, told New Europe on 4 March.

The head of the International Monetary Fund said the global spread of the virus has crushed hopes for stronger economic gains this year.

China's top gas importer PetroChina has declared force majeure on natural gas imports following the coronavirus outbreak.

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