Saudi minister: OPEC+ will take responsible approach to virus

Saudi Arabia's Minister of Energy Prince Abdul Aziz bin Salman Al-Saud has stressed that OPEC+ will do everything it can to tackle coronavirus. (Reuters)
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Updated 26 February 2020

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.


BMW in dash for cash as German car sales plummet amid coronavirus chaos

Updated 06 April 2020

BMW in dash for cash as German car sales plummet amid coronavirus chaos

  • Chancellor Angela Merkel said this week that restrictions on public life would be extended to at least April 19

FRANKFURT: BMW is following other German carmakers in pumping up its financial liquidity to ride out the coronavirus crisis, its chief executive said Friday, as car sales in the auto-mad nation booked their steepest plunge in almost 30 years in March.
“Circumstances as serious as this can threaten the existence of even a large company,” BMW boss Oliver Zipse said in an interview circulated to staff.
“We have already introduced large-scale measures, in particular to secure our liquidity,” Zipse added, calling the steps an “absolute priority” but without going into details.
High-end competitor Daimler, which builds Mercedes-Benz cars, said Thursday it had agreed a new 12-billion-euro ($13 billion) credit line with banks, “increasing its financial flexibility.”
A hint at the pressure on carmakers came from Volkswagen boss Herbert Diess last week, when he said virus-imposed shutdowns were costing the sprawling 12-brand giant up to two billion euros per week.
Official data showed new registrations of cars on German roads plunging in March to their lowest in almost three decades.
Sales tumbled 38 percent year-on-year to just over 215,100, according to the KBA vehicle licensing authority.
“Necessary health policy measures, like the massive limits on public life, closure of car dealerships and limited ability to work in the licensing offices” had braked the car trade, the VDA carmakers’ federation said.
Domestic demand fell 30 percent, while foreign orders were down 37 percent.
In a quarterly comparison, sales in January-March were down 20 percent year-on-year.
“April is likely to be even more catastrophic,” analysts from consultancy EY predicted.
In European virus epicenter Italy, where lockdown restrictions are even harsher, transport ministry figures released Thursday showed sales collapsing by more than 85 percent year-on-year in March.
At just over 28,300 cars registered, Italian sales were “at a level comparable with the early 1960s, when mass car ownership in our country was just getting started,” experts at car industry research center Promotor commented.
“Forecasts for the coming months call for similar or even worse falls until the crisis is over,” they added.
In Germany, “even if the acute crisis were overcome in summer, the economic and social consequences — massive increase in unemployment, plunges in income, bankruptcies — will continue to squeeze demand strongly,” EY predicted.
Ratings agency Moody’s expects the global auto market to contract 14 percent in 2020.
Up to 100,000 of the roughly 800,000 jobs in Germany’s massive auto sector could be at risk, according to recent estimate from University of St. Gallen expert Ferdinand Dudenhoeffer.
To weather the impact of the coronavirus restrictions, major manufacturers like Volkswagen, Mercedes-Benz parent Daimler and BMW have closed factories and placed tens of thousands of workers on government-funded shorter hours schemes.
Chancellor Angela Merkel said this week that restrictions on public life would be extended to at least April 19, including a ban on gatherings of more than two people and the closure of many businesses such as restaurants.