Opec+ discussing cuts of up to 1mn b/d: Delegate

Opec+ is discussing cutting as much as 1mn b/d from current oil production quotas, which could take the group's total cuts to 3.1mn b/d below October 2018 levels, sources say.

Opec and its non-Opec allies, known as Opec+, agreed in December to deepen their production cut target by 500,000 b/d to 1.7mn b/d in the first quarter this year. Saudi Arabia pledged a voluntary reduction of 400,000 b/d on top of that on condition that other participants stick to their quotas.

The Joint Technical Committee (JTC) that advises Opec+ recommended in February that the group cut an extra 600,000 b/d from their combined output in the second quarter to counter the effects of the coronavirus outbreak on global oil demand.

But the group is considering a deeper reduction of up to 1mn b/d, an Opec delegate said today. This would be on top of Saudi Arabia's existing voluntary cut of 400,000 b/d.

Several Opec ministers arriving in Vienna have expressed a need for the group to act in response to the effects of the coronavirus on oil demand and prices. But Libyan state-owned NOC head Mustafa Sanalla branded deeper cuts illogical.

The IMF, the World Bank and G7 central banks have all pledged action to support the global economy.

The JMMC monitoring committee is meeting today ahead of the Opec and Opec+ meetings on 5-6 March.

By Rowena Edwards and Ruxandra Iordache

source: Argus Media