* China's independent refiners cut output by 30-50%
* Brent posts steepest monthly decline since November 2018
* OPEC+ considering further 500,000 bpd cut to oil
production
(Updates prices)
By Bozorgmehr Sharafedin
LONDON, Feb 3 (Reuters) - Oil prices fell on Monday, dragged
down by concern over demand in China after the coronavirus
breakout, though the possibility of deeper crude output cuts by
OPEC and its allies offered some price support.
Brent crude was down 48 cents at $56.14 a barrel by
1320 GMT, having earlier lost more than $1 to its lowest since
January last year at $55.42.
U.S. West Texas Intermediate (WTI) crude fell 10
cents to $51.46 after hitting a session low of $50.42, also the
lowest since January last year.
As the coronavirus outbreak hit fuel demand in China, the
world's biggest crude oil importer, refiner Sinopec Corp
told its facilities to cut throughput this month by
about 600,000 barrels per day (bpd), or 12%, the steepest cut in
more than a decade.
Independent refineries in Shandong province, which
collectively import about a fifth of China's crude, cut output
by 30-50% in a little more than a week, executives and analysts
said.
The Organization of the Petroleum Exporting Countries (OPEC)
and its allies, a group known as OPEC+, are considering a
further 500,000 bpd cut to their oil output, two OPEC sources
and a third industry source told Reuters.
The OPEC+ group is also considering holding a ministerial
meeting over Feb. 14-15, one of the OPEC sources said, ahead of
a previously scheduled March meeting.
"The market needs assurances that the supply/demand equation
remains in balance for prices to hit a floor. This suggests a
commitment from OPEC not just to extend oil supply cuts, but
even implement deeper ones beyond March," said FXTM analyst
Hussein Sayed.
Iranian Oil Minister Bijan Zanganeh said that the oil market
is under pressure, with prices dropping below $60 a barrel, and
"efforts must be made to balance it".
On the first day of trade in China after the New Year
holiday, investors erased $393 billion from the nation's
benchmark equities index, sold the yuan currency and dumped
commodities as coronavirus fears dominated markets.
"Clearly travel restrictions and the extended shutdown of
large parts of the Chinese industrial sector have weighed on oil
demand and this is reflected in the weakness that we are seeing
in ICE Brent time spreads," said ING analyst Warren Patterson.
The premium of the first-month Brent contract to the
second-month contract <LCOc1-LCOc2> narrowed to 9 cents a barrel
on Monday, from 70 cents a month ago, indicating that traders
are not concerned about supply tightness because of the demand
impact of the coronavirus.
(Reporting by Bozorgmehr Sharafedin in London, Additional
reporting by Florence Tan in Singapore; Editing by Edmund Blair
and David Goodman)