On Mar. 5, the Organization of the Petroleum Exporting Countries (OPEC) recommended additional production cuts of 1.5 million b/d from the beginning of next month until the end of the year, in response to the slump of oil demand due to the coronavirus outbreak. However, on Mar. 6, Russia reportedly has refused to approve this deeper production cut.
The cartel will not only fail to make up for the decline in demand due to the coronavirus, but there is also uncertainty about whether current production cuts—in place until the end of March—will be extended.
Early Mar. 6, both WTI and Brent crude prices fell by more than 7% compared with Mar. 5 closing levels, to hit multiple-year lows.
Brent crude futures contracts for May delivery were last see seen at $46.53/bbl, while WTI contracts for April were seen at $42.61/bbl.
