Futures Movers: U.S. oil rises as OPEC+ committee calls for deeper cuts to global output amid coronavirus

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Oil futures traded mixed Thursday morning as a committee made up of representatives of OPEC and its allies advocated for cuts to global production to stabilize slumping crude values, which have been whacked by worries that have been at least partly fueled by the spread of coronavirus in China and its potential to hurt demand.

The OPEC+ Joint Technical Committee has recommended a cut of production of its members and other allies of 600,000 barrels a day to offset the impact of the viral outbreak, according to Bloomberg News, citing a delegate who attended a meeting of the group in Vienna.

However, the committee isn’t a decision-making body and the recommendation must be weighed by the Organization of the Petroleum Exporting Countries’s oil ministers. Moreover, one key ally and member of OPEC+, Russia, has expressed its reluctance for deeper reductions to global output.

Citing an unnamed source, Reuters reported that “Russia has asked for more time for consultations.”

OPEC+ ministers are scheduled to meet on March 5-6 and haven’t decided to schedule an earlier meeting, according to reports.

The Joint Technical Committee meeting in Vienna had been scheduled to end yesterday but was extended to an unplanned third day to debate ways to the coronavirus impact on crude.

West Texas Intermediate crude for March delivery CLH20, -0.32% gained 23 cents, or 0.5%, at $50.97 a barrel on the New York Mercantile Exchange, after jumping 2.3% on Wednesday. The U.S. benchmark entered a bear market on Monday, usually defined as a decline from a recent peak of at least 20%.

April Brent crude BRNJ20, -1.09%, however, was off 9 cents at $55.19 a barrel on ICE Futures Europe, following a nearly 2.5% rise in the previous session. The international benchmark also entered a bear market on Monday.

Chinese health authorities said the death toll from the coronavirus continued to rise, reaching 563, while the total number of cases countrywide now stands at 28,018, according to The Wall Street Journal (paywall).

Commodity experts have feared that the outbreak could hurt demand from one of the biggest importers of oil.