Kuwait's oil minister Khaled al-Fadhel said today he supports Opec+ efforts to reduce the surplus in oil stocks as the coronavirus outbreak weighs on demand and prices.
Opec ministers will meet in Vienna on 5 March, followed by a meeting of the Opec+ group on 6 March, to decide whether to adjust production quotas to counter the effects of the coronavirus outbreak on global oil demand.
The Joint Technical Committee (JTC) that advises Opec+ recommended last month that the group cut a further 600,000 b/d from their combined output in the second quarter.
The last Opec projection in mid-February suggested an Opec supply surplus of around 700,000 b/d for the three-month period. And demand is likely to have declined further since. Chinese refiners have requested a cut of at least 400,000 b/d in their Saudi allocations in March.
"Since last month's JTC meeting, the spread of [coronavirus] has made it clear that the recommended 600,000 b/d additional cut for the second quarter of 2020 will be seen as too little to prevent material inventory builds and it is clear that the group is mulling a deeper production pullback," director at Medley Global Advisors Mohammad Darwazah said.
Moscow is still evaluating the JTC recommendation, but has not received any proposal for a 1mn b/d reduction in the second quarter, energy minister Alexander Novak said yesterday.
Darwazah sees Novak's comments as "part of their pre-meeting negotiations strategy", as opposed to closing the door on larger cuts.
North Sea Dated crude prices fell to just over $55/bl in February, down by almost 13pc from January.
By Rowena Edwards
