THIRTEEN members of the Organisation of Petroleum Exporting Countries, OPEC on Monday hinted that they would extend their existing agreement to reduce oil supplies in a bid to raise prices after the outbreak of coronavirus in China led to a slump in global crude prices.

The global oil body and a Russia led oil-producing nations had formed an alliance known as OPEC+ in 2016 to cut down inventories and remove 1.2 million barrels per day of crude oil from global markets to increase crude prices.

The group plans to meet in March in Vienna to review its crude oil price scales and ascertain if it should extend production cuts or discontinue.

At the outset of the coronavirus fallout in China, crude oil prices slipped with West Texas Intermediate falling by 2.3 per cent at $52.90 per barrel and Brent crude, Nigeria’s oil equivalent dropped by 2.5 per cent to $58.40.

“The next two weeks are very critical for not only the oil market but the global economy. There is right now discussion among the ministers of OPEC+ of watching the market closely and preparing to do anything if there is a need for it,” an OPEC source speaking on condition of anonymity was quoted according to an S & P Splatts report.

Oil has been hit harder than most financial markets by fears stemming from the coronavirus due to transport restrictions, with Asia in the middle of oil demand growth.

China had imported 10.16 million barrels per day of crude oil in 2019, according to official data but with Chinese authorities shutting down its cities to contain the coronavirus the impact is being felt on the global oil economy.

The United Arab Emirates, UAE, energy minister Suhail al-Mazrouei in a statement on Monday downplayed the impact of the coronavirus on oil demand, saying China’s border closure effect on oil demand was exaggerated.

“It is important that we do not exaggerate projections related to future decreases in oil demand due to events in China, and the market does not over-react based on psychological factors, driven by some traders in the market.

“The next OPEC ministerial meetings will be in March of this year. During these meetings, OPEC and OPEC+ member countries will discuss market conditions and, if required, all options to ensure continued market balance,” he said.

However, ten members with quotas under the agreement, which exempts Iran, Libya, and Venezuela, produced 25.06 million barrels per day in December 2019, meeting their new collective ceiling of 25.15 million barrels per day.

“We are confident that all member countries will continue to make wise decisions that preserve the excellent work of recent years to bring supply and demand into balance,” the minister said.

OPEC+ is currently aiming to cut 1.7 million barrels per day of oil from the market through to the end of March to help mop up excess supply in circulation.