On Tuesday (February 11), international crude oil prices rebounded slightly, market concerns about the public health crisis in Asia gradually eased, and calls for OPEC to further reduce production were growing. There is still uncertainty about the impact of public health risks on the economy, which also affects the market's judgment of future crude oil demand. At the same time, Russia has not yet decided whether to participate in further OPEC+ production reduction, so the oil price still faces downward pressure.
Parviz shahbazov, former Soviet energy minister of Azerbaijan, said Azerbaijan could support OPEC and its allies to further cut oil production if necessary, to balance demand concerns from the Asian public health crisis. Azerbaijan is not a member of OPEC, but it is a member of the OPEC+ group, which was informally established in 2016.
Although Azerbaijan's contribution to OPEC's overall production reduction is modest, its position may reflect Russia's thinking, as non-OPEC members usually make unanimous decisions. Moscow has yet to agree to further cuts. OPEC+ oil producing countries are scheduled to hold a meeting in Vienna from March 5 to 6, but the meeting may be ahead of schedule, depending on how the Asian public health crisis affects oil prices. Brent crude fell below $55/ barrel on Friday.
Crude oil prices have fallen sharply in the past few weeks amid concerns that the outbreak of the virus could weaken global demand for crude oil. Brent crude oil futures settled last Friday at $54.47/ barrel, down 16% from its recent high on January 20, while WTI futures fell 14% over the same period.
OPEC and 10 allies, including Russia, are discussing whether to cut production further to contain the decline in oil prices. Last week, a technical committee of OPEC recommended that the cartel reduce production by another 600,000 barrels/ day on the basis of an agreement to cut production by 1.7 million barrels/ day as of the second quarter, in response to the expected impact on oil demand. As a major non-OPEC member, Russia has yet to commit to the agreement. The agreement requires the agreement of all 23 OPEC member states.
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