OPEC & allies meet as coronavirus hits demand

OPEC and allied oil producers are set to convene for a two-day meeting in Vienna amidst growing concerns about the impact of the coronavirus outbreak on global oil demand. The meeting is crucial for the global oil market as stakeholders discuss potential production cuts and strategies to stabilize oil prices. Kayode Akindele, Partner at TIA Capital, provided insights into the upcoming meeting in an interview with CNBC Africa. Akindele highlighted the challenges facing oil producers and the need for coordinated efforts to address the current market conditions. The coronavirus outbreak has significantly disrupted global economic activities, leading to a sharp decline in oil demand. As countries implement travel restrictions and quarantine measures, the demand for oil, particularly jet fuel and gasoline, has dropped substantially. This situation has put pressure on oil producers, including OPEC and its allies, to respond effectively to prevent oversupply and further price volatility. Akindele emphasized the importance of collaboration among oil-producing countries to navigate the current market challenges. He highlighted the need for a unified approach to production cuts to support oil prices and ensure market stability. The meeting in Vienna serves as a platform for discussions on potential output adjustments and market strategies to address the evolving demand landscape. The interview touched upon the impact of the coronavirus outbreak on oil demand projections for the coming months. Akindele noted that the uncertainty surrounding the duration and severity of the outbreak makes it challenging to accurately forecast future oil demand. However, he underlined the importance of proactive measures by oil-producing countries to mitigate the impact of the demand shock and stabilize the market. In conclusion, Akindele expressed optimism about the potential outcomes of the OPEC meeting and underscored the significance of coordinated efforts to address the current challenges in the oil market. The decisions taken at the meeting are expected to have far-reaching implications for global oil prices and market dynamics in the coming months.