FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo
February 7, 2020
By Stephanie Kelly
NEW YORK (Reuters) – Oil prices were little changed on Friday as Russia said it would need more time before committing to output cuts sought by other large producers as the coronavirus outbreak fans worries about global crude demand.
Oil is on track for its fifth consecutive weekly decline, as speculators have backed away due to weaker consumption figures and expectations that the virus, which has killed more than 600 people, will remain a drag on demand.
Brent crude <LCOc1> futures were up 6 cents to $54.99 a barrel by 11:26 a.m. EST (1626 GMT). Brent was on track for a 5.5% loss for the week. U.S. West Texas Intermediate (WTI) crude <CLc1> futures fell 4 cents to $50.91 a barrel, on track for a weekly loss of 1.3%.
A panel advising the Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, suggested this week provisionally cutting output by 600,000 barrels per day (bpd).
On Friday, Russia Energy Minister Alexander Novak said Moscow needed more time to assess the situation, stopping short of giving a clear Russian position on the proposal.
“Russia’s lack of commitment thus far to such a deal is providing one additional bearish element that is currently precluding the complex from sustaining price advances,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Prices have fallen about a fifth since the outbreak of the virus in the city of Wuhan in China. The country is the world’s biggest importer of crude, taking in roughly 10 million bpd in 2019.
Novak predicted global oil demand may fall by 150,000 to 200,000 barrels per day (bpd) in 2020 in part because of the virus.
The OPEC+ group this year deepened existing cuts to roughly 1.7 million bpd, nearly 2% of global demand, yet prices have remained in a narrow band. Producers in OPEC+ are scheduled to meet in Vienna on March 5-6, although the meeting could be brought forward because of concerns surrounding the virus.
Forecaster Eurasia Group said it estimates a contraction in oil demand in China of as much 3 million bpd in the first quarter from 2019 levels.
Sources have told Reuters that Chinese policymakers are preparing measures, including more fiscal spending and interest rate cuts, amid expectations the outbreak will have a devastating impact on first-quarter growth. [nL4N2A70C6]
(GRAPHIC: Change in Brent crude oil prices since Jan. 20 – https://fingfx.thomsonreuters.com/gfx/ce/7/8459/8440/BrentCrudePriceChangeSinceJan202020.png)
(Additional reporting by Noah Browning in London and Aaron Sheldrick in Tokyo; Editing by David Evans and Louise Heavens)
