Coronavirus may push OPEC to further extend output cut deal

Coronavirus may push OPEC to further extend output cut deal

BAKU, Azerbaijan, Jan. 28

By Leman Zeynalova – Trend:

Coronavirus may push OPEC to further extend the output cut deal, Trend reports citing Fitch Solutions Macro Research (a unit of Fitch Group).

“Media reports have unnamed OPEC sources raising the prospect of deeper production cuts by the group to stem the impact of the virus on oil prices. Oil prices fell sharply on Monday on concerns about a protracted economic slump in the Chinese economy from effect the coronavirus outbreak in China. Intraday prices swung lower having so far narrowed to just above $59 per barrel, a decline of 2.9 percent off Friday’s closing price for Brent,” reads a report released by Fitch Solutions.

The report says that Saudi Energy Minister Prince Abdulaziz bin Salman sought to reassure markets, with a statement that OPEC would respond to concerns about the coronavirus fallout on oil demand.

“While unclear on the actions to be taken, this could include increasing the duration newly enacted cuts beyond March 2020 or even committing to deeper production cuts. Prince Abdulaziz bin Salman was confident that any negative global economic factors could be mitigated by continued or even increased OPEC supply management,” said the company.

Fitch Solutions anticipates such action by OPEC will help support confidence in the market and provide some price stability and the setting for prices to recover, once the number of virus cases begins to wane, although it is unclear at this point when that will be.

“However we do note that sentiment remains bearish in the market, as evident by lack of positive price action from the recent outages in Libyan production. OPEC will face the persistent headwinds of lessened demand in their attempt to stabilise prices through supply management,” reads the report.

While the immediate economic impacts have yet to hit physical oil demand, negative oil price sentiment is building as Monday’s price drop reveals, according to Fitch Solutions.

“As the peak of the virus has yet to be established much of the potential impact on the global economy is unknown. Likewise, the potential level of OPEC+ action is difficult to quantify given the data available. However, taken together OPEC and Russia were holding 1.9mn b/d of oil out of the market in December 2019 meaning any substantial increase would need to be on par with the outages of September 2019 which would be a challenge to sustain. In addition, we note that OPEC+ agreement and compliance often varies significantly for some members making further production cut increases challenging.”

---

Follow the author on Twitter: @Lyaman_Zeyn

Subscribe to Trend in Google News! Subscribe
Russia’s Astrakhan, Baku discussing possibility of building ships for Azerbaijan
Russia’s Astrakhan, Baku discussing possibility of building ships for Azerbaijan
Georgia’s construction equipment vendor to represent UK company in Azerbaijan
Georgia’s construction equipment vendor to represent UK company in Azerbaijan
Khizi-Absheron wind farm to allow Azerbaijan to increase export of gas - expert
Khizi-Absheron wind farm to allow Azerbaijan to increase export of gas - expert
Loading Bars
Latest
Azerbaijan increases wine imports from Georgia
Epsilon obtains industrial gas inflow from new well at field in Uzbekistan
AFAB Cataract Campaigns on Int’l Day of Elderly in Niger (FOTO)
JP Morgan expects Azerbaijan’s oil output to decline in 2022-2023
Amount of loans issued by Iranian banks soars
NIOC intends to extract gas from Iran-Saudi Arabia joint Farzad B gas field
Azerbaijani FM leaves for Austria on working visit
Iran sees increase in trade turnover with ECO member states
UAE bourses open in red after Houthi attack on Abu Dhabi
Time of market test for Greece-North Macedonia gas pipeline announced
Azerbaijan holding talks on regular flights to Fuzuli Int’l Airport – deputy minister
Georgia reveals wine export growth dynamics in strategic markets
Azerbaijan reveals procedure of buying tickets for bus trips to liberated lands
Trips to Azerbaijan's liberated areas on all routes to be carried out in one day - ministry
At first stage only Azerbaijani citizens allowed to visit Karabakh – deputy minister
Citizens can visit liberated districts of Azerbaijan once a year - agency (PHOTO)
Police cars to accompany passenger buses through Azerbaijani liberated lands
Azerbaijan discloses cost of bus trips to liberated areas (PHOTO)
Azerbaijan to launch regular bus trips to Karabakh soon
Kazakhstan to keep inflation in energy sector within set borders - ministry
President Ilham Aliyev unveils monument to philanthropist Haji Zeynalabdin Taghiyev in Baku (PHOTO)
Iran’s NIOC interested in increasing gas exports
Azerbaijan discloses loans of banks being liquidated by Deposit Insurance Fund
Turkmenistan, Uzbekistan affirm commitment to Afghanistan
Azerbaijani Express-C company’s bonds included in listing of Baku Stock Exchange
Azerbaijan Airlines to present new “Azal Club” loyalty program
Kazakhstan to amend supply chain of petroleum products
2021 enters Azerbaijani history as year of social reforms - Analysis
Turkmenistan, Uzbekistan see significant increase in mutual trade
Georgia’s trade turnover figures grow – TBC Capital
2022 budget for Ighdir-Nakhchivan gas pipeline disclosed
Georgia publishes COVID-19 data for January 18
Azerbaijan, Turkey discuss co-op on restoration projects in Karabakh
Uzbekistan shares domestic COVID-19 data for January 17
New school built in Azerbaijan's Gazakh on Heydar Aliyev Foundation's initiative (PHOTO)
Iran's Energy Exchange announces products to be on sale on January 18
Kazakh Gas Processing Plant opens tender to buy spares for pumps
Azerbaijan shares data on prices of various food products for 12M2021
Money transfers from Kazakhstan to Georgia triple
Kazakhstan eyes to build fish factory in Mangystau region
Iran shares data on cooking oil imports
Iranian currency rates for Jan. 18
Water supply in several villages of Azerbaijan's Karabakh restored (PHOTO)
Brent climbs above 7-year high on Mideast tensions, tight supply
Turkmenistan discloses amount of products sold via local commodity exchange
Global problem of rising food prices - causes and solutions - ANALYSIS
Washington Post publishes article of Portugal-based traveler on Azerbaijan's Khinalig (PHOTO)
NATO looks forward to continued broad practical cooperation with Azerbaijan in coming period
Brent oil reaches $87 per barrel on ICE for first time since 2014
Turkey confirms 64,935 daily COVID-19 cases
Number of detained rioting, looting suspects in Almaty exceeds 2,700
5.0-magnitude quake jolts central Turkey
U.S. Senate panel to debate app store reform bill
United Airlines warns 5G plan would impact 1.25 mln passengers a year
Bayern striker Lewandowski awarded Best FIFA Men's Player of Year 2021
Yellen says U.S. economy "has never worked fairly for Black Americans"
North Korea confirms tactical guided missile test on Monday - media
4th Pfizer, Moderna shot less effective against Omicron: Israeli study
Kuwait's justice minister tests positive for COVID-19
Passenger traffic at Frankfurt airport picks up in 2021
Israel reduces COVID-19 quarantine to keep economy going
Number of COVID-2019 cases across globe exceeds 325 million - WHO
Kazakhstan discloses data on mutual trade with top CIS partners
Israel's unemployment rate drops to 6, lowest since plagued by COVID-19
Turkey supports Georgia's participation in 3+3 peace talks
Solar power excels in Turkey's rapid shift to green energy sources
Azerbaijan FM receives delegation led by Chairman of Parliament of Montenegro (PHOTO)
Thousands of flights canceled in eastern U.S. as winter storm heads north
Shavkat Mirziyoyev hosts Deputy PM of Turkmenistan Serdar Berdimuhamedov
Magnitude 5.6 quake hits western Afghanistan, killing more than 20
US Joint Chiefs chairman and Marine Corps chief have COVID-19
Six servicemen returned by Azerbaijan arrested in Armenia
Approval of U.S. pandemic response hits new low: poll
Georgia exports 107 mln bottles of wine in 2021, record high in 9 years
Turkey condemns drone attack targeting Abu Dhabi
Nearly 60% of voters support amendments to Serbia’s constitution — electoral commission
Azerbaijani Prime Minister talks bilateral agenda with Chairman of Montenegro's Parliament
Turkmenistan, Afghanistan agree to resume TAPI construction
Another offshore project to boost operations at Kazakhstan's Kashagan
Russia and China - potential investors in Iran's ports
Azerbaijan shares data on number of vaccinated citizens
Cooperation opportunities between Azerbaijan, Qatar's SMEs discussed in Baku (PHOTO)
Azerbaijan confirms 359 more COVID-19 cases, 263 recoveries
Price indexes of financial, industrial sectors at Uzbek stock exchange fall
Foreign visitors spending more money in Georgia
Russia’s Astrakhan, Baku discussing possibility of building ships for Azerbaijan
Cargo transportation via Iran’s Mehrabad International Airport up
Market capitalization of Baku Stock Exchange reaches highest level
Iran’s Bahar Azadi gold coin price falling
French agency to support sustainable development of livestock sector in Uzbekistan
Saudi index hits 15-year peak on higher oil prices
SOCAR, Axens ink agreement within modernization of Baku Oil Refinery (PHOTO)
Iran shares figures on date harvesting
Azerbaijan joins logistics project with Russia, Uzbekistan on rapid food supply
Bank of Israel optimistic that Omicron won't harm economic growth
Russia to introduce digital technologies in work with Azerbaijani partners - Russian ministry
Retail sales of computer equipment in Azerbaijan increases
Georgia sees increase in money transfers from Azerbaijan
Brazil keen to import urea and petrochemical products from Iran
Uzbek Commodity Exchange announces weekly quotes of commodities for export
All news