LONDON/MOSCOW (Reuters) - An OPEC+ committee weighed the impact on global oil demand and economic growth of the outbreak of the coronavirus at a meeting on Tuesday, hearing from China’s envoy to the United Nations in Vienna and discussing how to respond.
The envoy, Wang Qun, addressed the Joint Technical Committee (JTC) at its meeting in Vienna, an OPEC source said. The JTC advises the Organization of the Petroleum Exporting Countries and its allies led by Russia, a grouping known as OPEC+.
Oil has fallen more than $11 a barrel this year to $55, below the level many OPEC countries need to balance their budgets. Producers are weighing further output cuts and moving a planned policy meeting to February rather than March.
One OPEC source said it was likely the meeting date would be brought forward “if a further cut is agreed by Saudi Arabia and Russia.” Another OPEC source also said the meeting would probably be held earlier than March.
Other OPEC+ sources and a industry source familiar with the discussions told Reuters on Monday that OPEC+ members were considering cutting oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus.
The JTC, which began its meeting at about 1200 GMT in Vienna, is studying different scenarios for whether deeper cuts or an extension to a current output reduction deal is needed, sources said.
Officials will continue meeting on Wednesday and are taking the outbreak of the SARS virus in 2003 as an example to assess the potential impact of the coronavirus on demand, another OPEC+ source said.
Iraq, OPEC’s second-biggest oil producer, supports any agreement that would stabilise the market, Oil Ministry spokesman Asim Jihad said on Tuesday.
Russian Energy Minister Alexander Novak, however, said he could not say for sure if it was time to tighten output curbs.
OPEC+ has been reducing oil supply to support prices, agreeing in December to cut output by 1.7 million bpd until the end of March. Its next meeting is scheduled for March 5-6.
The partners are also discussing extending the duration of the cuts and separate OPEC sources said last week the group wanted to prolong the curbs until at least June.
Saudi Arabia’s economy, the largest in the Arab world, remains reliant on hydrocarbon revenues despite plans to diversify. The kingdom needs prices of around $80 to balance its state budget.
Writing and additional reporting by Alex Lawler; Additional reporting by Rania El Gamal in Dubai; Editing by David Evans and Edmund Blair