By Oke Peter
The Organisation of Petroleum Exporting Countries’ Non-OPEC producing countries’ Joint Ministerial Monitoring Committee (JMMC) has disclosed that based on the report of its Joint Technical Committee (JTC) for the month of September 2017, OPEC and participating Non-OPEC producing countries have achieved a record high conformity level with the voluntary production adjustments, reaching 120 per cent.
The JMMC was established following OPEC’s 171st Ministerial Conference Decision of 30 November 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 at which 11 (now 10 after Equatorial Guinea became a Member of OPEC), non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a concerted effort to accelerate the stabilization 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 1 January 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July, 2017.
In September 2017, the OPEC and participating non-OPEC producing countries achieved an excellent conformity level of 120 per cent, the highest level since the start of the Declaration of Cooperation. This again underscores the resolute commitment of participating producing countries to cooperate towards the rebalancing of the market.
The JMMC expressed satisfaction with the overall results and encouraged all participating countries to continue on the path towards conformity, for the benefit of producers and consumers alike.
The JMMC noted that while some participating producing countries have consistently performed beyond their voluntary production adjustments, others are yet to achieve 100 per cent conformity.
The JMMC took note of the recent developments in the market and expressed confidence that the oil market is moving in the right direction towards the objectives of the Declaration of Cooperation. Indicative of these positive developments are the recent upward revisions for global oil demand growth in both 2017 and 2018.
Commercial oil stocks in the OECD fell further in September and the difference to the latest five-year average has been reduced by 178 million barrels since the beginning of this year, however, there remains another 159 million barrels of stock overhang to be depleted.
The JMMC will continue to monitor other factors in the oil market and their influence on the ongoing market rebalancing process. All options are left open to ensure that every effort is made to rebalance the market for the benefit of all.
The next JMMC Meeting is scheduled to be held in Vienna, on 29 November 2017.