Oil cartel Opec’s technical committee has recommended a 600,000 barrel per day production cut in an attempt to counter falling demand due to China’s coronavirus outbreak.
Sources told Reuters that the group was awaiting Russia’s decision on the potential cut, which is larger than the 500,000 barrel curb that had been mooted.
If approved by Opec, total production cuts would grow to 2.3m barrels per day, after the group agreed substantive cuts at its December meeting in Vienna.
The producer group is rumoured to be considering moving its next meeting forward to mid February to tackle the crisis, which has knocked 20 per cent off oil prices this year.
The coronavirus outbreak, which has killed 563 people so far, has crippled Asian markets, with Chinese oil imports falling from 11m to 7m barrels a day in recent weeks as economic activity stalled.
A widespread reduction in airline services due to fears over the spread of the virus has also impacted demand.
This morning Total chief Patrick Pouyanne joined the growing number of voices warning that the disease would have a “substantial” effect on the market.
Pouyanne’s comments came as Total reported a 13 per cent fall in revenue in 2019.
Earlier in the week BP’s former finance chief Brian Gilvary, who said that global demand could be cut by up to 0.5 per cent, nearly 500,000 barrels per day, over the whole year due to the virus.
After a rise of nearly four per cent yesterday, Brent crude showed little residual momentum this morning, rising only 0.33 per cent to $55.47.
West Texas Intermediate rose one per cent to $51.26.