OPEC, fuel demand in focus

Oil slid on Friday as worries about demand for fuel being sapped by the global coronavirus outbreak were heightened by concern over non-OPEC crude producers not yet having agreed to cut output further to support prices.

Brent crude fell 47 cents, or 0.9%, to $49.52 per barrel by 0223 GMT, while U.S. West Texas Intermediate (WTI) was down 42 cents, or 0.9%, at $45.48 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday pushed for crude output by OPEC and associated producers — a group known as OPEC+ — to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. The call came ahead of an OPEC+ meeting scheduled for Friday in Vienna.

Non-OPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said. But Russia and Kazakhstan, both members of OPEC+, said they had not yet agreed to the deeper cut, raising the risk of a collapse in cooperation that has propped up crude prices since 2016.

Some analysts expected Moscow to ultimately endorse the agreement.

“If it says no, the entire union could collapse — and with it any new bilateral trade and investment deals in the pipeline as well as the strategic influence Moscow has secured by participating in the production agreement,” RBC Capital Markets said in a research note.

“There will be a flurry of high level calls between Moscow, Riyadh and Abu Dhabi to get the deal done.”