AFP, Vienna :
Ministers from the OPEC group of oil-producing countries will meet in Vienna Thursday to try to overcome their divisions on how to react to the fall in oil prices in the wake of the novel coronavirus epidemic.
The group already had to contend with abundant supply on global markets weighing on prices but the spread of COVID-19 across the world has sent them plunging.
The European benchmark of Brent sank to under 50 dollars on Sunday, a level not reached since July 2017.
The effects of the virus on global demand – particularly in worst-hit China – has blown a hole through the group’s attempt to support prices at its last meeting in December by agreeing on production cuts.
The only option for OPEC – and its allies in the OPEC+ grouping who will be joining meetings on Friday – would appear to be another round of production cuts.
The success of the summit, which has been called three months ahead of the next scheduled meeting, will above all hang on the alliance between Russia and Saudi Arabia, the world’s second and third-biggest producers and the most important players in the OPEC and OPEC+ groupings respectively. “Their objective will be to overcome their differences of opinion so as to be able to speak with one voice from tomorrow,” said Carsten Fritsch, analyst at Commerzbank. The splits on the way forward even within OPEC were on display on Wednesday as delegations arrived.
Ministers from the OPEC group of oil-producing countries will meet in Vienna Thursday to try to overcome their divisions on how to react to the fall in oil prices in the wake of the novel coronavirus epidemic.
The group already had to contend with abundant supply on global markets weighing on prices but the spread of COVID-19 across the world has sent them plunging.
The European benchmark of Brent sank to under 50 dollars on Sunday, a level not reached since July 2017.
The effects of the virus on global demand – particularly in worst-hit China – has blown a hole through the group’s attempt to support prices at its last meeting in December by agreeing on production cuts.
The only option for OPEC – and its allies in the OPEC+ grouping who will be joining meetings on Friday – would appear to be another round of production cuts.
The success of the summit, which has been called three months ahead of the next scheduled meeting, will above all hang on the alliance between Russia and Saudi Arabia, the world’s second and third-biggest producers and the most important players in the OPEC and OPEC+ groupings respectively. “Their objective will be to overcome their differences of opinion so as to be able to speak with one voice from tomorrow,” said Carsten Fritsch, analyst at Commerzbank. The splits on the way forward even within OPEC were on display on Wednesday as delegations arrived.
