UNITED STATES (OBSERVATORY NEWS) — Even if OPEC reduces production by 600 thousand barrels per day, oil price weakness may persist until April, CNBC reports citing S&P Global Platts.
Quotes will remain under pressure as stocks rise amid declining oil demand due to an outbreak of coronavirus, explained Kang Wu, head of Asian analytics at S&P Global Platts.
Measures to curb the spread of the virus, including shutting down Chinese enterprises and canceling flights around the world, have hit the demand for fuel.
An additional reduction in production will provide some support to the market, said Wu. However, he said, “in terms of prices, [the market] may still be weak in March and April before it improves in the summer.”
According to estimates by the International Energy Agency (IEA), in the first quarter, global oil demand will decline for the first time in more than 10 years due to the effects of COVID-19.
The OPEC + Technical Committee recommended reducing production by an additional 600 thousand barrels per day to support demand in an epidemic.
OPEC and its allies, led by Russia, are expected to meet in Vienna on March 5-6.
The cost of April futures for Brent crude on the London ICE Futures exchange by 14:36 Moscow time decreased by 2.25% and amounted to $ 52.23 per barrel.
The price of WTI contracts for April delivery in electronic trading on the New York Mercantile Exchange (NYMEX) fell 2.3% to $ 47.61 per barrel.
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