Algeria: OPEC calls for more oil cuts on coronavirus impact

US crude oil stocks production up for w  ending Feb. 7

The report also noted that January saw a sharp decline in OPEC's output as producers implemented a new production-cut pact that the cartel's allies agreed to in December in order to buoy crude prices.

The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global growth in oil demand due to coronavirus by 230,000 bpd - a fairly modest assessment compared with other forecasters. Quarter two of 2020 is expected to average 1.04 million barrels per day, falling to 1.02 million in quarter three and increasing again to 1.03 million in quarter 4. Yet the proposal has so far met resistance from Russian Federation, the group's most important ally, which is able to weather lower prices more easily.

The revised forecast for global oil demand could bolster the case for even more production curbs.

The Opec oil cartel on Wednesday lowered its forecast for growth in global oil demand this year by almost a fifth due to the impact of the coronavirus outbreak in China.

On the Multi Commodity Exchange, crude oil for February delivery dropped by Rs 2, or 0.05 per cent, to Rs 3,660 per barrel with a business volume of 28,202 lots. Still, the increase remains slightly higher than last year's. The global crude benchmark traded at a US$3.97 premium to WTI for the same month.

The U.S. government on Tuesday cut its growth forecast for this year by 310,000 bpd. They embarked on a new round of cutbacks in January.

A committee appointed by the Opec club of oil-producing countries and its allies to study the effects of coronavirus recommended additional output cuts on Saturday, Algeria's energy minister said.

Russia Energy Minister Alexander Novak said Moscow needed more time to assess the situation, adding that USA crude production growth would slow and global demand was still solid.

OPEC's latest outlook may encourage them to give greater consideration to taking additional measures.

With that said, the ongoing commitment to the "Declaration of Cooperation" may continue to provide a floor for crude prices, and the price of oil may attempt to break out of the monthly range as the Relative Strength Index (RSI) flashes a textbook buy signal.



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