Organization of the Petroleum Exporting Countries (OPEC) and its allies is to meet in Vienna, Austria on March 5, to evaluates the pressure on oil prices amid the coronavirus outbreak - Photo by OPEC Secretariat Office

JAKARTA (TheInsiderStories) – Organization of the Petroleum Exporting Countries (OPEC) and its allies is to meet in Vienna, Austria on March 5 – 6, to decide on the future of their latest round of output cuts amid the coronavirus outbreak. In this year, the oil prices has down 25 percent.

For the week, Brent lost almost 14 percent, its biggest weekly percentage decline since January 2016, while West Texa Index (WTI) fell over 16 percent in its biggest weekly percentage drop since December 2008.

The group has already slashed oil output by 1.7 million barrels per day (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.

Commenting on the latest development, President Vladimir Putin said Russia was ready to work with its OPEC+ partners to support the world oil market. But he admitted feeling comfortable with the current price of crude oil.

“The fact that Russia has large financial reserves to reduce the impact of turbulence on the market does not eliminate the need for action, including in cooperation with our foreign partners,” he stated, as reported by Bloomberg.

OPEC’ main producer, Saudi Arabia, has pushed for rapid steps to reduce oil production to offset the decline in oil demand due to coronavirus outbreaks. Russia, the most important non-OPEC partner in the coalition, has so far resisted the push, underlining the dominant role Putin has played since forming an alliance with the Saudis three years ago.

Several members of the oil cartel, 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.

Last February, Algeria’ minister of energy, Mohamed Arkab said, the Joint Technical Committee has recommended  extending voluntary production adjustments under the ‘Declaration of Cooperation’ process until the end of 2020 and to proceed with an additional adjustment until the end of the second quarter.

The JTC’ recommendations come in response to the fact that the epidemic “has had a negative impact on oil demand and oil markets”. said the minister.

“The coronavirus epidemic is having a negative impact on economic activities, particularly on the transportation, tourism and industry sectors, particularly in China, and also increasingly in the Asian region and gradually in the world,” he added.

Last Friday, West Texas Index prices stood at US$51.42 and Brent Crude $49.67 a barrel. While the OPEC Basket at $51.89 per barrel.

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