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Oil slips amid demand concern, fears over OPEC+ deal for deeper output cuts

Published 03/06/2020, 10:31 AM
Updated 03/06/2020, 10:32 AM
© Reuters. Oil slips amid demand concern, fears over OPEC+ deal for deeper output cuts
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* OPEC aims to cut output by 1.5 mln bpd to end-2020
* Wants non-OPEC to contribute 500,000 bpd cut
* Russia, Kazakhstan yet to agree to deepen output cuts
* OPEC+ to meet in Vienna on Friday

By Shu Zhang
SINGAPORE, March 6 (Reuters) - Oil slid on Friday as worries
about demand for fuel being sapped by the global coronavirus
outbreak were heightened by concern over non-OPEC crude
producers not yet having agreed to cut output further to support
prices.
Brent crude LCOc1 fell 47 cents, or 0.9%, to $49.52 per
barrel by 0223 GMT, while U.S. West Texas Intermediate (WTI)
CLc1 was down 42 cents, or 0.9%, at $45.48 per barrel.
The Organization of the Petroleum Exporting Countries (OPEC)
on Thursday pushed for crude output by OPEC and associated
producers - a group known as OPEC+ - to be cut by an extra 1.5
million barrels per day (bpd) in total until the end of 2020.
The call came ahead of an OPEC+ meeting scheduled for Friday in
Vienna. Non-OPEC states were expected to contribute 500,000 bpd to
the overall extra cut, OPEC ministers said. But Russia and
Kazakhstan, both members of OPEC+, said they had not yet agreed
to the deeper cut, raising the risk of a collapse in cooperation
that has propped up crude prices since 2016.
Some analysts expected Moscow to ultimately endorse the
agreement.
"If it says no, the entire union could collapse — and with
it any new bilateral trade and investment deals in the pipeline
as well as the strategic influence Moscow has secured by
participating in the production agreement," RBC Capital Markets
said in a research note.
"There will be a flurry of high level calls between Moscow,
Riyadh and Abu Dhabi to get the deal done."

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