Russia's decision threatens to derail a plan by OPEC ministers for deeper reductions to cope with the coronavirus outbreak
Oil prices nosedive on OPEC reports, coronavirus
Russia says it will not back OPEC call for extra oil output cuts, will only agree to extending existing curbs.
Friday 06/03/2020
Russia's decision threatens to derail a plan by OPEC ministers for deeper reductions to cope with the coronavirus outbreak
LONDON - World oil prices, already slumping on coronavirus fears, extended losses to more than 5.0 percent Friday on reports Russia wants to delay deeper output cuts recommended by its OPEC allies.
In London morning deals, Brent North Sea crude dived to $47.02 per barrel, the lowest levels since July 2017. WTI tumbled to $43.28 - the lowest since late 2018.
Prices recovered some of the losses, although Brent was still down 4.4 percent and WTI 4.3 percent lower on its level late Thursday in New York.
The sudden plunge Friday came with all eyes on Russia at the gathering of OPEC countries and non-cartel producers in Vienna.
But Russia will not back an OPEC call for extra oil output cuts and will only agree to extending existing curbs, a Russian source said on Friday, threatening to derail a plan by OPEC ministers for deeper reductions to cope with the coronavirus outbreak.
"That position won't change," the high-level Russian source told Reuters.
OPEC ministers said the coronavirus outbreak had created an "unprecedented situation" that demanded action, as measures to stop the virus spreading dampens global economic activity and oil demand. Forecasts for 2020 demand growth have been slashed.
The ministers backed on Thursday an additional 1.5 million barrels per day (bpd) of oil cuts until the end of 2020, a much bigger and more extended move than expected, but they made the proposal conditional on Russia and other non-OPEC producers backing the curbs.
Russian Energy Minister Alexander Novak has made no public statements about the proposed extra cuts during his trips to and from Vienna this week, although Moscow has long indicated it was uneasy about any further output reductions.
Existing cuts by OPEC+ amount to 2.1 million bpd, but those have failed to support oil prices which have lost a quarter of their value since the start of the year.
"There is a problem. OPEC has no intention to cut without Russia. We need to do something or the consequences will be drastic for everyone," a source from a Gulf producer said.