The Organisation of Petroleum Exporting Countries (OPEC) members including Nigeria has achieved new level of 149 per cent compliance with voluntary production/ reduction in oil output, aimed at stemming oil supply glut and price crash.
Also, non-OPEC membes have achieved similar feat.
The OPEC/non-OPEC Joint Ministerial Monitoring Committee (JMMC) at its eighth meeting held in Jeddah, the Kingdom of Saudi Arabia, announced that, based on the report of the Joint Technical Committee (JTC) for last month, OPEC and participating non-OPEC countries have achieved a conformity level of 149 per cent with their voluntary production adjustments, the highest level so far.
The JMMC was established following OPEC’s 171st Conference Decision of November 30, 2016, and the the Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on December 10, 2016 at which 11 (now 10) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a concerted effort to accelerate the stabilisation of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.
The resulting Declaration, which came into effect on January 1, 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on May 25, 2017, decided to extend the voluntary production adjustments for another nine months commencing July 1, 2017.
At the third joint OPEC-Non-OPEC Producing Countries’ Meeting, held last November 30, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of the year.
Once again, participating countries have demonstrated unwavering dedication to achieving the rebalancing of the global oil market, as demonstrated by the high conformity level of 149 per cent. Their collective efforts continue to yield positive results, with market fundamentals being solid.
Organisation for Economic Cooperation and Development’s (OECD’s) commercial stock levels have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels last month, corresponding to a drop of 300 million barrels. Nevertheless, it was noted that the current commercial stocks remain above levels seen before the market downturn. The high conformity level has been validated by a diverse range of reporting agencies and media outlets.
The JMMC tasked the secretariat to look into different metrics, with an in-depth analysis of addressing larger uncertainties in the market.
The JMMC urged participating countries to remain focused on and, where necessary, intensify their efforts on the basis of the core principles of transparency, fairness and equity, which are central to the “Declaration of Cooperation.”
The JMMC noted assuring statements by Iraq, Kazakhstan, Libya and Venezuela and expressed its satisfaction with Iraq and Kazakhstan’s expression of support for further improving their conformity levels.
Given the ongoing transformative impact which the “Declaration of Cooperation” has on the global oil market, the JMMC will continue to think through further means of strengthening the Cooperation.
JMMC also thanked Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia and Chairman of the JMMC for his hospitality, as well as paying tribute those involved from Saudi Arabia for arranging the meeting.
The next JMMC Meeting is scheduled to be held on June 21 at the OPEC Secretariat in Vienna, Austria.