OPEC Only Faces One Choice in China Virus Crisis
The new coronavirus will take a chunk out of China's oil demand. Producers must respond with an output cut.
Oil producers aren’t alone in wanting Chinese motorists to be able to get back on the road.
Photographer: Qilai Shen/BloombergOil producers are starting to feel the impact of the new coronavirus as it continues to spread, and they need to take drastic action to head off a potentially devastating impact on prices. The world’s biggest producers face two key questions, how long will it last and how severe will the consequences will be? The answers are of course still elusive, but the OPEC+ group of nations will need to weigh some educated guesses soon.
The initial reaction resembles that of an agitated anthill, with frantic scurrying in all directions amid an apparent lack of coordination. The final days of last week saw calls for their next meeting, scheduled for the first week of March, to be brought forward, perhaps by as much as a month. That move appeared to be driven by Saudi Arabia, OPEC’s biggest producer, but initially found little support from the largest of the non-OPEC members of the wider group — Russia.