(Bloomberg) -- Saudi and Russian leaders held a rare phone call as oil markets tumbled, the latest signal that the OPEC+ alliance is trying to build a consensus for an output cut to prop up prices.
Russian President Vladimir Putin and Saudi King Salman bin Abdulaziz discussed the global energy market on Monday evening, the Kremlin said in a statement. Both leaders confirmed “readiness to continue cooperation within OPEC+,” it said. The kingdom also confirmed the call.
U.S. crude futures sank below $50 a barrel for the first time in more than a year on Monday, as fears gripped investors that the deadly coronavirus outbreak in China is crushing demand in the world’s biggest oil-importing nation. Global benchmark Brent crude in London slid below $55 to the lowest in over a year.
The rout has added pressure on the producer group, and while leading member Saudi Arabia has been pushing since last week for action, it has met resistance from Russia. Oil demand in China is said to have plunged as much as 20% because of the virus outbreak, with cities in lockdown, flights canceled, and refineries curbing operations.
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Technical experts from the OPEC+ coalition, which includes the Organization of Petroleum Exporting Countries and other producers such as Russia, will meet in Vienna on Tuesday to evaluate the virus’s impact.
The officials’ assessment may help determine whether the 23-nation alliance -- which pumps about half the world’s oil -- convenes an emergency ministerial meeting later this month to consider new production cuts.
OPEC and its allies only recently started a fresh round of deeper production cutbacks, the latest step in a three-year effort to prevent plentiful U.S. shale supplies putting the global market into surplus. But the outlook has deteriorated rapidly in the last few weeks as the coronavirus clouds the outlook for the global economy.