Today, the oil price slips more than 1 percent ahead of key meeting between OPEC and allies and a record weekly jump in US weekly crude stocks - Photo by OPEC Secretariat Office

JAKARTA (TheInsiderStories) – The heads of Organization of the Petroleum Exporting Countries (OPEC) recommended an extending the duration of the proposed 1.5 million barrels per day (bpd) additional adjustment until the end of 2020, instead of June 30. The proposals sent to all participants at OPEC’ extraordinary meeting in Vienna, Austria on Thursday (03/05).

“The consultations, monitoring and constant review undertaken of current market conditions demonstrate the strong commitment of OPEC Member Countries to work together to restore oil market stability,” the organization said.

The new reduction was 50 percent above the 1.0 million bpd cut initially floated by OPEC initiated by Saudi energy minister, Abdulaziz bin Salman. But, the oil cartel’ top ally, Russia, had not yet signed off on the plan.

The Declaration of Cooperation members are determined to jointly rise to meet the current pressing challenge despite coronavirus impact. But, the news not bring good news to the oil market.

On Thursday, crude prices tumbled 2.2 percent, with Brent finishing under the key US$50-a barrel marks at $49.99. While, West Texas Intermediate (WTI) settled down 1.8 percent to $45.90 per barrel.

Last week, crude prices fell as much as 16 percent following the loss of hundreds of millions of barrels in demand to the COVID-19. It was the market’ worst week since October 2008, when the Great Recession was beginning.

Despite some recovery this week, WTI remained down 24 percent on the year and Brent dropped 23 percent. While, International Energy Agency estimates that the annual demand for oil across the world could fall by 435,000 bpd in the first quarter of 2020, the first quarterly contraction in more than a decade.

Last year, the group has already slashed oil output by 1.7 million bpd under a deal that runs to the end of March. In an initial response to counter the hit of the virus, an OPEC+ has recommended deepening output cuts by 600,000 bpd.

Several members of OPEC, including Iran, are known to be one of the countries most affected by the virus so far. The spread of the coronavirus and the efforts of world governments to stem the epidemic have raised questions about whether the OPEC meeting will take place in its normal format in Vienna.

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