OPEC ministers are beginning to arrive to Vienna on Tuesday as the group debates whether to further reduce oil production to tackle deteriorating demand from the global spread of the new coronavirus.
The Organization of the Petroleum Exporting Countries and allies led by Russia agreed in December a collective cut of 1.7 million barrels per day to their supply until the end of this month.
Saudi Arabia has been voluntarily cutting an additional 400,000 bpd, meaning OPEC+ is effectively curbing production by 2.1 million bpd.
But since then, the global outbreak of the coronavirus, which first emerged in China, has weighed on global oil demand as industrial activity slowed, while global air traffic has taken a big hit.
The International Energy Agency said global oil demand growth has fallen by 435,000 bpd in the first quarter to its lowest level in a decade, and said that this forecast may be revised even further.
OPEC has been discussing cutting oil production by a further 1 million barrels per day , among other options, as it seeks to stabilise falling prices. That is more than an initially proposed cut of 600,000 bpd.
Talk of the bigger cut has helped lift oil prices in recent days. Brent crude and WTI prices have rebounded somewhat over the past two days from a more than 20% drop from their 2020 peak in January.
But on Tuesday Leonid Fedun, vice-president of Russia’s second-biggest oil producer Lukoil , told Reuters that a 1 million bpd additional cut would be enough to balance the market and lift oil prices back to $60 a barrel.
The global death toll has now risen above 3,000, with more than 86,500 infections, and the virus is now spreading outside China at a much faster rate than within the country where it began.