UPDATE 4-OPEC, Russia moving closer to big oil cut as coronavirus hits demand

* OPEC ministers to meet in Vienna on Thursday
* Saudi Arabia, others want new cuts of 1 mln bpd - sources
* Russia hesitating on additional reductions
* Oil prices have slid 20% since December

(Adds panel recommendation)
By Ahmad Ghaddar and Shadia Nasralla
VIENNA, March 3 (Reuters) - A panel of OPEC and its allies
recommended cutting oil output by an extra 1 million barrels per
day (bpd) on Tuesday signalling that Russia and Saudi Arabia
were moving closer to a deal to prop up prices which have been
hit by the coronavirus outbreak.
Saudi Arabia and some other OPEC members have been pushing
for deeper cuts as crude prices have plunged 20% since the start
of the year but had struggled to persuade Russia to support the
additional reduction.
The Organization of the Petroleum Exporting Countries,
Russia and other producers already have a deal in place to cut
output from Jan. 1 by 2.1 million bpd, a figure that includes
additional voluntary cuts by Saudi Arabia.
But that has not been enough to counter the impact of the
virus on China, the world's biggest oil importer, and on the
global economy, as factories are disrupted, fewer people travel
and other business slows, curbing oil demand.
To try to halt the spread of the virus, other international
conferences around the world have been scrapped, prompting OPEC
officials to consider whether their talks should be held in
person or by video.
On Tuesday, the group said the number of delegates attending
would be limited and journalists, who usually chase ministers,
would be barred from OPEC's Vienna headquarters. "It will be difficult diplomatically. Ministers shake hands,
hug, kiss (on cheeks). What will we do?" one delegate said.
Before this week's meeting, sources said Saudi Arabia and
some others producers had proposed extending the existing pact
beyond its March expiry until the end of 2020 while also cutting
another 1 million bpd of output only for the second quarter.
Russia, which has indicated support for an extension, has
yet to swing behind the proposal for deeper cuts, even though
oil prices have tumbled to about $51 a barrel LCOc1 .
At that level, many OPEC states will struggle to balance
their budgets, although President Vladimir Putin has said that
the current price was acceptable to Moscow. CUT'
A cut in U.S. interest rates on Tuesday offered only limited
support for crude ahead of the OPEC meeting on Thursday and the
wider OPEC+ meeting on Friday.
An OPEC+ panel, the Joint Technical Committee (JTC), meeting
on Tuesday before oil ministers gather, effectively backed the
Saudi proposal, according to a text of recommendation.
Russia is also a member of JTC, suggesting Moscow might also
be leaning towards larger cuts.
Last month, the committee recommended a smaller 600,000 bpd
cut but on Tuesday it said it supported an extra cut of up to 1
million bpd.
"We will discuss the possibility of a new substantial cut by
withdrawing from the market the quantities that are not consumed
due to the coronavirus (outbreak)," Algerian Oil Minister
President Mohamed Arkab said before heading to Vienna.
"The trend is towards the continuation of the cuts adopted
in December 2019. We already have a consensus between OPEC and
non-OPEC, including Russia, on this point," Arkab, who is also
the current OPEC president, told state news agency APS.
A committee comprising a handful of OPEC and non-OPEC
ministers, convenes on Wednesday at 1130 GMT, part of the
process of drawing up recommendations for the wider gathering.
Under the existing pact, OPEC and its allies agreed at the
end of last year to cut 1.7 million bpd from the market while
Saudi Arabia, OPEC's biggest producer, made voluntary additional
cuts of 400,000 bpd.
Offering some encouragement to those seeking to win over
Moscow to further reductions, the vice-president of major
Russian oil producer Lukoil LKOH.MM , Leonid Fedun, said the
proposal to cut up to 1 million bpd would be enough to balance
the oil market and lift prices to $60 a barrel. "We are ready to cut as much as we are told to. Better to
sell less oil but at a higher price," Fedun told Reuters.

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