Coronavirus impact: Opec may cut production marginally, says Moody’s Investors Service

“Q1 is being largely written off by a lot of these sectors, we just saw Singapore announcing its quarterly gross domestic product forecast and for 2020, they have lowered the range. We would expect similar trends coming across the region where economic activity has come down whether it is tourism or consumption,” he further added.

The market seems to be taking some support from the Organisation of Petroleum Exporting Countries (Opec) as there may be deeper cuts and extension of cuts when Opec and its allies meet in the first week of March.

“Opec will continue to hold on to its production quotas and possibly cut a little bit. I don’t think they are going to cut significantly from where they have cut their production in the last meeting. The view will be that brent oil around $60 per barrel is somewhat within their comfort zone. Overall the urgency to cut production at the Opec level may not be very high if this virus situation is contained,” Halan noted.