Watch the video to know more about the OPEC production cut
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Video Credit: Rumble
Oil cartel OPEC and its allies could cut production by more than a million barrels a day as the coronavirus takes a toll on global growth.
Oil price took a tumble on Monday and international benchmark Brent Crude was down about 1.5%.
And, the reason is the coronavirus which is believed to have originated in the central city of Wuhan.
In China, the world’s biggest crude importer – refiner Sinopec has announced to cut production by about 600,000 barrels per day.
Now, OPEC could cut production by more than a million barrels a day as the coronavirus continues to spread across the world.
Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC: “I think it is a ‘go big or go home’ moment for the organization.
If you are going the route of an extraordinary meeting, you will have to come up with a substantial reduction in order to prevent the market from further tanking.”
Representatives from OPEC are planning to cut production by more than a million barrels a day after discussing the serious issue in a meeting in Vienna.
However, analysts predict it could prompt a smaller cut instead of a large cut.
Yogi Dewan, CEO of Hassium Asset Management, told CNBC: “We’re expecting production cuts to the tune of about 500,000 barrels per day.
OPEC is looking at this very, very carefully, just thinking to themselves, we need to do something here just to help support oil prices.”
Due to the deadly coronavirus, 425 people have died in China while 20,400 have been infected.
Several cities have been placed under lockdown in order to prevent the spread of the virus.
Thailand, Hong Kong, the United States, Taiwan, Australia, Macau, Singapore, Japan, South Korea, Malaysia, France, Canada, Vietnam, Nepal, Cambodia, and Germany have also reported the cases of the virus.
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