March 5, 2020 / 8:27 AM / 24 days ago

OPEC meets before crunch talks with Russia on cutting more oil output

* Riyadh pushing for cuts of 1-1.5 mln bpd

* Moscow reluctant so far to cut more output

* Oil price slide hits OPEC members’ budgets hard

* Virus outbreak has hammered crude demand outlook

By Shadia Nasralla and Ahmad Ghaddar

VIENNA, March 5 (Reuters) - OPEC ministers gathered in Vienna on Thursday to discuss cutting output, a day ahead of crunch talks with Russia which has yet to sign up to their plans for production curbs that aim to shore up crude prices battered by the coronavirus outbreak.

Saudi Arabia wants OPEC and its allies, including Russia, to cut 1 million to 1.5 million barrels per day (bpd) for the second quarter and to keep existing cuts of 2.1 million bpd in place until the end of 2020.

But Riyadh, the biggest producer in the Organization of the Petroleum Exporting Countries, and other members of the group have failed so far to win over Russia’s backing for the cuts during preliminary meetings in Vienna ahead of Friday’s crunch talks.

Moscow, which has cooperated on output policy since 2016 in an informal group known as OPEC+, has indicated it would back an extension of existing curbs but has resisted deeper cuts, although in the past negotiations Russia’s early reluctance has given way to a last-minute agreement.

Russian Energy Minister Alexander Novak, who met his Saudi counterpart Prince Abdulaziz bin Salman on Wednesday, has returned to Moscow for consultations but will return for Friday’s meeting of the broader OPEC+ group.

The Saudi minister has given little public indication of progress towards a deal. Asked whether a ministerial panel on Wednesday had made any recommendation for a deal, he told reporters: “I want to keep you in suspense.”

Novak made no public statements during his brief trip to Vienna for the preliminary talks on Wednesday.

OPEC sources had said earlier this month that Saudi Arabia might push through cuts even without Russia on board. But sources on Wednesday indicated growing frustration with Russia, saying Riyadh - already cutting far more than its quota demands - did not want to shoulder an even bigger burden without Moscow.

Oil demand has been hit hard by the coronavirus outbreak. Original forecast for growth in crude demand in 2020 have now been slashed with factory operations, travel and other economic activities around the world curtailed by measures to stop the virus spreading.

Benchmark Brent crude has tumbled 20% so far this year to hover around $51 a barrel, a level at which Saudi Arabia and other OPEC producers will struggle to balance their budgets, although Russia has said it can cope with that price. (Additional reporting by Alex Lawler, Rania El Gamal and Olesya Astakhova; Editing by Dmitry Zhdannikov and Edmund Blair)

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