Oil producers move to curb output, shore up sagging prices

OPEC and non-OPEC producers may shave another 500,000 barrels per day off their oil output as the impact from a coronavirus epidemic is weighing on the market.

According to Press TV, their energy ministers are about to meet on Feb. 14-15 to put a floor on oil prices which have taken a hit from a prolonged trade war between the United States and China and a glut of shale supply in North America.

Iran’s Minister of Petroleum Bijan Zangeneh said on Monday the spread of the cornovirus has further hit oil demand as he called for efforts by OPEC members and their allies such as Russia to balance the prices.

“The oil market is under pressure and prices have dropped to under $60 a barrel and efforts must be made to balance it,” he said in Tehran.

Oil has fallen $10 a barrel this year to $56. On Tuesday, prices rose 1% on expectations that main producers would move to curb production.

International benchmark Brent crude traded at $54.94 a barrel, up 49 cents, while US West Texas Intermediate (WTI) crude was up 68 cents at $50.79, Reuters reported.

Russia, a major producer outside OPEC, has indicated that it is on board to support output curbs. “Russia is ready to cooperate in this format,” Kremlin spokesman Dmitry Peskov said on Monday.

Analysts say the spread of the coronavirus in China threatens to cut oil demand by 250,000 barrels per day.

SS