Oil slips amid demand concern, fears over OPEC+ deal for deeper output cuts

Published 06/03/2020, 03:31
Updated 06/03/2020, 03:36
© Reuters.  Oil slips amid demand concern, fears over OPEC+ deal for deeper output cuts
LCO
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* OPEC aims to cut output by 1.5 mln bpd to end-2020

* Wants non-OPEC to contribute 500,000 bpd cut

* Russia, Kazakhstan yet to agree to deepen output cuts

* OPEC+ to meet in Vienna on Friday

By Shu Zhang

SINGAPORE, March 6 (Reuters) - 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 LCOc1 fell 47 cents, or 0.9%, to $49.52 per

barrel by 0223 GMT, while U.S. West Texas Intermediate (WTI)

CLc1 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."

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