Russia Says No To Proposed OPEC Production Cuts Due To The Cut In Oil Demand From China Caused By The Coronavirus Outbreak

CNBC: Russia’s reluctance for a production cut exposes possible crack in three-year-old OPEC alliance

* Russia has not so far endorsed a recommendation from a technical committee for OPEC and its allies to deepen production cuts. Oil analysts said it shows a possible lack of harmony in the producers’ alliance.
* The technical committee monitoring the market and production for OPEC+ recommended a 600,000 barrel a day additional cut to stabilize the market.
* The impact of the coronavirus on transportation in China and elsewhere has dealt a serious blow to the oil market, which could see demand drop by 1 million to 2 million barrels a day temporarily.

Russia’s reluctance to jump on board a bigger OPEC production cut may signal a potential fissure within the oil producer alliance, known as OPEC plus.

Led by Saudi Arabia, other OPEC producers and Russia were considering an emergency meeting to cut production in response to the impact of the coronavirus, but it’s not now clear whether that will happen.

A committee advising the producers met for three days in Vienna and on Thursday recommended a 600,000 barrel a day reduction in production to bring relief to the oil market, according to reports. The Joint Technical Committee, made up of representatives of producing countries, is not a decision making entity, and it only makes recommendations to the ministers of OPEC countries and its allies, including Russia.

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Update #1: Oil is in a tailspin over the coronavirus and OPEC might not be coming to the rescue (CNN)
Update #2: Factbox: Coronavirus hits demand for oil, energy (Reuters)

WNU Editor: OPEC wants a 600,000 barrel/day production cut, but China has already reported that they are expecting a massive 25% drop in oil demand .... China energy executives braced for 25% fall in domestic oil demand (Financial Times). If this virus spreads and infects other Asian countries in the same manner as it has in China, OPEC is going to be under more pressure for production and price cuts. I also expect a major hit for other commodity demands and prices.

Update #3: I am expecting a 2% - 3% drop in the world's GDP if this crisis continues for the next few months.

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