Coronavirus: OPEC to Hold Emergency Meeting over Oil Demand Worries

By Adedapo Adesanya   

The Organisation of Petroleum Exporting Countries (OPEC) is in discussions to bring forward its earlier scheduled March meeting as the oil market continues to face unfavourable outcomes as a result of the coronavirus outbreak.

According to the Algerian Energy Minister Mohamed Arkab, who is also the OPEC President, the cartel meeting scheduled for March 5 and 6 is likely to be moved to February.

But Mr Arkab said a decision will be made in the coming days to see what the next course of action will be as the disease continues to spread, reaching over 15 countries that has created a panic that is affecting the global economy.

“It is very likely to advance to February the OPEC meeting, initially scheduled for the beginning of March, so that we can find the means to ensure market balance,” Mr Arkad said,

OPEC and its allies including Russia agreed at a meeting held on December 6 meeting to implement a 1.7 million barrels per day production cut for the first three months of 2020 and to meet March 5-6 in the OPEC Headquarters in Vienna, Austria to decide on any next steps.

However, with the coronavirus spreading and oil prices falling sharply due to concerns about the state of the Chinese economy and jet fuel demand, the alliance looks set to be spurred into taking a quick action, with sources saying deeper cuts could be considered.

An outbreak of the illness has affected close to 8000 people and killed over 200 as at Friday morning since the first case was reported on December 30, 2019 in Wuhan, the capital of China’s Hubei province.

Also, airlines across the globe suspend flights to China as oil prices slumped, adding to the pressure on OPEC and its allies to extend or deepen the group’s oil-production cuts.

The agency declared the outbreak a global health emergency on Thursday, citing fears that the coronavirus may reach countries with weak health care systems.

As at the time of this report, Brent crude was trading at $57.92 per barrel and the West Texas Intermediate crude future has rallied early Friday morning to $52.80 per barrel.