Supply isn’t an issue but demand is and demand growth is so fragile that an excuse like coronavirus has caused the 15% drop in prices the past few weeks.
OPEC and 10 allies, including Russia, are debating whether to institute deeper production cuts to stem the price slide.
An OPEC+ technical committee last week recommended that the coalition cut an additional 600,000 b/d on top of its existing 1.7 million b/d cut accord through the second quarter, to combat the coronavirus’ expected hit to oil demand. Russia, the main non-OPEC participant, has yet to commit to the deal, which requires unanimous approval by all 23 OPEC+ countries.
The coalition is next scheduled to meet March 5-6 in Vienna, but delegates have said it could be moved forward if a consensus on new cuts can be reached in advance.