OPEC+ fails to agree further cuts in oil production

By Ovunc Kutlu

ANKARA (AA) - OPEC and non-OPEC oil producing countries failed to agree on Friday to further cuts their oil production levels after seven hours of negotiations.

Oil producing countries of the group dubbed as OPEC+ could not agree on deeper oil production cuts to mitigate the negative impact of coronavirus outbreak on weak global oil demand that raises the glut of supply in the oil market.

After holding five hours of bilateral negotiations, followed by an additional two hours of closed-door meeting among member states' delegations, the oil producing nations could not come up with a deal in the Austrian capital Vienna.

OPEC advised Thursday that the organization and its allies in non-OPEC should reduce their total oil production by an additional 1.5 million barrels per day (bpd) for the first half of 2020.

OPEC proposed it could reduce its total output by 1 million bpd if non-OPEC countries would lower their total production by 0.5 million bpd.

That proposal, however, failed after OPEC and non-OPEC could not find a way for how the proposed cuts would be distributed among their member states.

It also remains a question whether the current production cut of 1.7 million bpd of OPEC+ would be extended when it expires at the end of March.

It is yet unknown whether OPEC heavyweight Saudi Arabia would continue to voluntarily cut its individual production by another 400,000 bpd.

Failure to extend the present curb means there could be an additional 2.1 million bpd of crude oil in the market when the second quarter of 2020 begins.

Given that global oil demand remains weak due to coronavirus, the rising glut of supply in the market could push crude prices lower.

With no OPEC+ deal, crude oil prices showed massive losses of almost 10% late Friday.

Price of international benchmark Brent crude fell to as low as $45.29 per barrel at 1631GMT for a daily loss of 9.4%.

American benchmark West Texas Intermediate (WTI) plummeted to $41.77 a barrel at the same time for a 9% decline.