Oil futures headed lower Friday as investors awaited more clarity on Russia’s stance on discussions centered on deepening global output cuts to help respond to the novel coronavirus outbreak in China. A forecast from a Russian energy official about the impact from the viral outbreak also may be weighing on markets.
Russian Energy Minister Alexander Novak said on Friday that the country needed more time analyze the oil market and would clarify its position on deeper cuts next week. He also estimated that global demand would drop by 150,000 to 200,000 barrels per day this year due to the epidemic that originated in Wuhan City, China, according to CNBC.
The Russian oil official’s comments come as China’s National Health Commission on Friday confirmed more than 31,000 cases of the deadly pneumonialike virus in the country, with more than 630 deaths. The disease also continues to spread outside the country.
Russia, a key producer of crude oil outside of the Organization of the Petroleum Exporting Countries, is a member of a group known as OPEC+ that had been weighing measures to stabilize oil prices beyond its current production curbs, with the virus expected to deliver an economic hit to China, one of the biggest importers of crude oil.
An OPEC+ Joint Technical Committee recommended on Thursday a cut to production of its members and other allies of 600,000 barrels a day, according to several news agencies. S&P Global Platts said the recommendation calls for that cut to begin in April and run through June.
But the committee isn’t a decision-making body and the recommendation must be weighed by OPEC’s oil ministers. OPEC+ ministers are scheduled to meet on March 5-6 and haven’t decided to schedule an earlier meeting, according to reports.
Against that backdrop, oil has been under pressure, sliding into a bear market — a decline of at least 20% in an asset from a recent peak — earlier this week.
West Texas Intermediate crude for March delivery CLH20, -1.28% was 68 cents, or 1.3%, lower at $50.27 a barrel on the New York Mercantile Exchange.
April Brent crude BRNJ20, -0.95% was off 61 cents, or 1.2%, at $54.30 a barrel on ICE Futures Europe.
For the week, WTI is headed for a 2.5% weekly slump, while Brent is on pace for a decline of more than 4%, according to FactSet data.
Meanwhile, commodity investors didn’t appear to react to a report on U.S. employment, with the U.S. economy adding 225,000 jobs in January, according to a Labor Department report, above the 165,000 jobs expected by economists polled by MarketWatch.
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