After a meeting that went long into the night, OPEC+ is in for another hectic few days of haggling as it works out how to respond to the demand slump being caused by the coronavirus outbreak.
OPEC+ technical committee's recommendation was for an expansion of its ongoing cuts of 1.2 million barrels per day (bpd) by 600,000 bpd.
But before the evening was done last night, a number as high as 1-1.2million bpd was being touted around, something that has held firm for much of this (Mar 5) morning and afternoon. Quite frankly, events have overtaken OPEC and demand forecasters are shooting blind at the moment, as the Oilholic noted via Forbes at IPWeek.
But given the global proportions of the coronavirus spread, potential for $30 per barrel prices and demand growth shrinkage, Wall Street is finally waking up to the magnitude of the demand destruction that could happen. Here's yours truly's latest Forbes take on the subject.
Lets see how the day unfolds. But for a deepening of that magnitude Saudi Arabia's headline production will have to drop below ~9 million bpd; and should that happen it'll be a bit of whopper facilitated by Saudi Crown Prince and Powerbroker-in-chief Mohammed Bin Salman! Keep reading, keep it 'crude'!
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© Gaurav Sharma 2020. Photo: Ministerial Limos arrive at OPEC Secretariat in Vienna, Austria © Gaurav Sharma, Mar 5, 2020.