The Organization of the Petroleum Exporting Countries (OPEC) is taking steps to boost the slumping price of oil.
Oil climbed to $51 U.S. a barrel in New York after officials from OPEC gathered for an urgent meeting to assess the impact of the coronavirus on global demand, and how the group should respond.
Under increasing pressure after crude prices sank below $50 U.S. a barrel for the first time in more than a year, technical experts from OPEC and its allies met at the cartel’s Vienna headquarters to evaluate the disease’s impact. The outcome of the discussions may determine whether the group convenes an emergency meeting to consider new output cuts later in February.
So far, the virus has upended trade flows and probably led to a 20% cut to China’s oil demand -- the world’s biggest importer-- as cities are quarantined and factories are halted. Refineries are curbing operations and shutting plants, while the nation’s top processor is seeking to re-sell millions of barrels of West African crude it no longer needs because of the squeeze to consumption. The crisis could wipe out a third of the growth in global oil consumption this year.
West Texas Intermediate for March delivery added 96 cents to $51.09 U.S. a barrel on the New York Mercantile Exchange early Tuesday. The prices of commodities from energy to metals have stabilized, while iron ore and crude in China recovered some ground. Chinese officials are reviewing whether to soften the economic growth target for 2020 and authorities in Beijing are hoping the U.S. will agree to some flexibility on pledges in their phase-one trade deal due to the virus outbreak.
The next OPEC ministerial meeting was already scheduled for March, but the group is considering whether to hold that gathering earlier to respond to the virus and its impact on prices.
