Mar 2, 2020 - Energy & Environment

Coronavirus looms over OPEC+ meeting

A barrel of oil wearing a mask.

Illustration: Sarah Grillo/Axios

OPEC and Russia are slated to meet in Vienna this week to decide whether to extend and deepen their production-cutting agreement as the novel coronavirus eats into global oil demand.

Why it matters: The economic slowdown from the spread of the virus has pushed oil prices down to their lowest levels in over a year — creating new tests for the 3-year-old OPEC+ alliance between the cartel, Russia and allied producers.

What they're saying: Via S&P Global Platts, Russian President Vladimir Putin said yesterday that "for the Russian budget, for our economy, current oil prices are acceptable."

  • But per their piece and others, Putin also emphasized the need for "action" with their foreign partners.
  • The current supply-limiting deal expires at the end of this month.

What's next: Bloomberg took the pulse of analysts and found a widespread expectation that the March 5–6 meeting will yield new cuts.

  • "All but two of 29 analysts, traders and brokers in a global poll predicted that the Organization of Petroleum Exporting Countries and its allies will announce new curbs, with an average expectation of 750,000 barrels a day," they report.

But, but, but: The price plunge is hitting the industry in the U.S. too as shale producers, already struggling to make money, feel the pinch. The Wall Street Journal has more.

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