Oil prices have tanked 12% since coronavirus exploded globally — but key OPEC members swear the alliance will take action to stabilize if needed

Gwen Everett

February 25, 2020 3:32 PM

Oil has tumbled 12% since the outbreak of coronavirus, with WTI and Brent crude both tumbling almost 4% Monday.

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford

Oil and energy ministers from OPEC member countries are scrambling to reassure markets amid the selloff but questions remain around whether Russia will support further cuts at the alliance's meeting next week.
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A brief respite from fear around the coronavirus outbreak ended abruptly Monday in a selloff that saw WTI crude fall 3.7% and Brent crude drop 3.8%.

The tumble continued into Tuesday. The WTI generic contract is now dow 12% since the start of the outbreak.

The losses come as oil and energy ministers from OPEC+ member countries scramble to reassure investors that the alliance is capable of taking action to stem a further deterioration in prices.

"We do communicate with each other, we use every opportunity to talk with each other," Saudi energy minister Prince Abdulaziz bin Salman said Tuesday, CNBC reported. " We did not run out of ideas, we haven't lost our phones and there are always good ways of communicating through conference calls and technology is very helpful."

Coronavirus, the fast-spreading disease that originated in Wuhan, China, and has killed 2,600 and infected almost 80,000 , has economic ramifications that directly impact oil. China is the top importer of oil globally, meaning that a drop off in the nation's growth which analysts are increasingly predicting could undermine oil prices.

There had been a temporary reprieve in oil markets as fears around coronavirus receded from the top of mind, but those fears returned definitively to WTI and Brent prices Monday, with WTI posting its worst losses of the outbreak.

OPEC has already cut oil production by 1.7 million barrels per day, but uncertainty remains around whether the group will cut production further at its March 5-6 meeting, CNBC reported. Russia is reportedly undecided on whether it would support further cuts.

But Bahrain's oil minister, Sheikh Mohammed bin Khalifa Al Khalifa said in an interview with CNBC that the alliance would consider a 600,000 bpd cut at the meeting next week. "If the market mechanism and the consensus is yes then, absolutely, yes."

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