OPEC looks to cut production as virus outbreak hits demand
The oil-producing countries of the OPEC cartel are considering slashing output to contain a plunge in prices that has been worsened by concerns about the virus outbreak’s disruption to the world economy.
Oil ministers from the group’s 14 countries were gathering in Vienna on March 5 as energy producers were taking a hit from a 25 percent slide in crude prices since January.
Since the new coronavirus outbreak began in China last month, air travel to the country – the world’s second-largest economy – has all but stopped. Demand for transportation fuel inside the country dropped dramatically and manufacturing was idled as cities with millions of residents locked down to contain the spread of the virus. Major companies around the world have halted business travel as meetings were canceled out of precaution.
Oil prices stabilized ahead of this week’s meeting on expectations that OPEC and non-OPEC members would agree to deeper production cuts. Some analysts predict the cartel will agree to slash production by 1 million barrels per day, on top of existing cuts.