Oil prices are plummeting in early Friday trading, with West Texas Intermediate barrels changing hands for $44.05, down 3.7% from yesterday, and international benchmark Brent crude 3.4% cheaper at $48.13 a barrel.
In Vienna, the 14-state Organization of Petroleum Exporting Countries (OPEC) plus 10 more friendly oil producers such as Russia (which together make up OPEC+) are meeting later today to decide on export cuts to try and balance oil supply with demand -- which is declining in the face of Coronavirus.
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Yesterday, OPEC suggested that beginning next month its members and "plus" allies should cut oil production by a total of 1.5 million barrels per day and maintain this lower level of production through the end of 2020. By limiting supply, such a move could arrest the slide in oil prices, which have sunk about 18% in the past two weeks. Production cuts within OPEC, however, are said to be conditional on allied countries playing ball and cutting their own production -- which would be expected to make about one-third of the proposed cuts.
And that could be problematic for oil stocks.
This morning a "high-level" source from within Russia's team told Reuters that not only is the country not interested in cutting its oil production, but "that position won't change."
In OPEC's view, Russia agreeing to maintain previous production cuts while refusing to make further cuts could be a "worst-case scenario" for oil prices. Some experts warn that in such a scenario, oil prices could continue to fall 10% or more, into the "upper $30s."
