with Agency report
In a bid to cut outputs and shove up oil prices, the Organisation for the Petroleum Exporting Countries, OPEC led by Saudi Arabia will seek to persuade Russia on Wednesday to agree on larger additional oil output cuts.
The need to cut even more came up as prices tumbled by a fifth this year because of the coronavirus outbreak.
A technical panel of several representatives from OPEC states, Russia and other producers recommended on Tuesday cutting output by as much as an extra 1 million barrels per day (bpd) during the second quarter only.
It also recommended that existing cuts of 2.1 million bpd by the OPEC+, which meets in Vienna this week, be extended until the end of 2020.
Russia has so far signaled it might be willing to agree to extending existing cuts, which expire in March, but might find it difficult to sign up to deeper cuts.
“OPEC hopes for a cut bigger than 1 million but the challenge is still Russia,” an OPEC source told Reuters, saying much would depend on Wednesday’s meeting between Saudi Energy Minister Prince Abdulaziz bin Salman and his Russian counterpart Alexander Novak.
The Joint Ministerial Monitoring Committee, JMMC, comprising a handful of OPEC and non-OPEC ministers, convenes in Vienna on Wednesday at about 1130 GMT. The Saudi and Russian ministers are both on that committee.
Existing cuts have not been enough to counter the impact of the virus on China, the world’s biggest oil importer, and on the global economy, as factories are disrupted, fewer people are traveling and other business slows, curbing oil demand.
Benchmark Brent oil prices were around $52 a barrel on Wednesday, a level at which many OPEC states will struggle to balance their budgets, although Russian President Vladimir Putin has said the current price was acceptable.
Wednesday’s JMMC meeting is part of the process of drawing up recommendations for the wider meeting of ministers from the Organization of the Petroleum Exporting Countries on Thursday and a meeting of OPEC+ ministers on Friday.