OPEC set for emergency meeting this week to discuss coronavirus implications

An emergency meeting of the group could be convened on February 8 and 9 or on February 14 and 15

OPEC, OPEC+, Coronavirus

The OPEC+ group is expected to meet later this week to discuss measures that could help stabilise the global oil market, a senior OPEC official has said.

The group, led by Saudi Arabia and Russia, is set to hold a joint technical committee meeting on February 5 and 6, a senior OPEC official told The National newspaper.

The oil price has fallen nearly 13 per cent on worries about the potential economic fallout of the fast-spreading coronavirus. An emergency meeting of the group could be convened on February 8 and 9 or on February 14 and 15, Bloomberg reported on Friday.

Brent settled at $56.62 per barrel on Friday — its lowest since August — while West Texas Intermediate, which largely tracks North American crude grades, closed at a five-month low of $51.56 per barrel.

OPEC+ began to cut 1.7 million barrels per day of output since the beginning of January, a bigger cap on production to bolster prices that remained depressed last year due to the US-China trade war as well as slowing demand for crude.

The group is currently scheduled to meet in the first week of March in Vienna, Austria. That meeting, however, is unlikely to happen as an emergency meeting is instead convened later this week, the OPEC official, who declined to be named, said.

"We see the prices [of crude] falling a further 10 per cent from here," said Vijay Valecha, chief investment officer at Dubai-based Century Financial, told The National.

A drop in oil demand by 500,000 barrels per day is expected "on account of travel advisories and current lockdown in major Chinese trading hubs", he added.

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