Experts from OPEC+ recommended that oil ministers consider a larger production cut when they meet this week, as the havoc wrought on the world economy by the coronavirus prompted Wall Street to slash forecasts for energy demand. After a meeting on Tuesday — overshadowed by the logistical difficulties of gathering amid a raging global outbreak — the group’s Joint Technical Committee suggested an additional reduction in supply of between 600,000 and 1 million barrels a day during the second quarter, delegates said. That’s potentially a larger cut than it recommended last month, but falls short of some estimates of the demand hit from the virus.
The Organization of Petroleum Exporting Countries and its allies face an unprecedented challenge as the epidemic that started in China threatens to become a global pandemic. Growth in fuel consumption could be wiped out this year and prices have just had their biggest weekly drop since the world financial crisis.
To secure a supply cut that could stop the rout, the group must overcome Russian resistance while also grappling with the risks of bringing together delegations from 23 nations as the deadly disease continues to spread. One of those members, Iran, has a serious outbreak at home affecting top government officials.