А sharp drop in demand as well as gloomy market prospects urged OPEC+ to extend the current agreement to cut oil supply and reduce production further. OPEC Joint Technical Committee has recommended prolonging the agreement at least until the end of the year as well as imposing additional output cuts. The coronavirus outbreak was mentioned as the major negative factor that contributed to the decline of the global oil demand. Oil prices fell by 15 percent and were expected to drag even lower. Oil demand in China, the world’s biggest oil purchaser, eased by 20 percent, or 3 million barrels, severely affecting the global market. Meanwhile, OPEC+ technical panel has not decided on new quotas of production cuts unless there is general agreement on the need to reduce output further. The countries requested some time for consultation before they can make any decision. Currently, the recommendation for reducing output by 600 thousand barrels per day made by the OPEC+ technical committee in early February has been the only proposal to prevent panic in the market. Looking ahead, even deeper oil production cuts seem possible.
