Crude plummets as Opec+ fail to reach agreement

Opec+ members concluded today's meeting without an agreement to deepen or extend existing production cuts in the wake of the coronavirus outbreak, prompting Ice Brent crude futures to plunge by more than 9pc at one point, to below $45/bl.

Opec+ will continue to produce under current quotas until the end of March, after which member countries will have no commitments to restrict production.

Additional Opec+ consultations are likely to take place in the coming days or weeks, several Opec ministers said. Iran's oil minister Bijan Namdar Zanganeh said that Opec cannot cut alone without the contribution of non-Opec producers.

Opec members agreed last night to recommend that the Opec+ group deepen its collective cuts by 1.5mn b/d until the end of the year, having suggested earlier in the day that it should only apply to the second quarter. But Russia, the largest contributor to the non-Opec side of the agreement, opposed any deal to revise quotas, with sources saying the government would not allow them to cut production any further.

"We will gather plans of the [oil] companies. They must decide themselves. We will convene and decide," Russian energy minister Alexander Novak told Argus. "We will monitor how the situation with coronavirus and global parameters of supply and demand will be changing."

"We did not decide on the cut to be continued — which is the rollover — or we did not decide on additional cuts," UAE oil minister Suhail al-Mazrouei said. He agreed with other Opec ministers that the market needs additional cuts.

"Both sides of the market needs the new cut, and this new cut needs more consultation without any tension, to reach a new agreement to be implemented as soon as possible," Zanganeh said. He added that member countries need time to cool down before another consultation.

By Rowena Edwards, Ruxandra Iordache, Iain Packham and Anastasia Krasinskaya