OPEC and Non-OPEC countries which have participated in voluntary production cuts since late 2016, have in August achieved the highest level of conformity, according to the the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC).
To remind, in December 2016 eleven (now 10) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a joint effort to accelerate the stabilization of the global oil market through voluntary cuts in total production of around 1.8 million barrels per day.
The JMCC said on Friday that in August 2017, the OPEC and participating non-OPEC producing countries achieved “an excellent conformity level” of 116%, 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 said.
Worth noting, despite the reported 116% conformity, not all the parties have delivered in full.
“The JMMC noted that while some participating producing countries have consistently performed beyond their voluntary production adjustments, others are yet to achieve 100% conformity. Furthermore, the JMMC underscored the critical importance that all participating producing countries reach or exceed the 100% conformity rate, and recommended that the JTC continue building on the progress made at the JTC Extraordinary Session held in Abu Dhabi on 8 August, to support each participating country in their efforts towards achieving full conformity with the Declaration of Cooperation,” reads a statement on the OPEC website.
According to the statement, the JMMC took note of recent market developments and expressed confidence that the oil market is moving in the right direction towards the objectives of the Declaration of Cooperation.
According to OPEC, recent data confirmed that global oil demand growth in 2017 is now better than expected, while for 2018, world oil demand is anticipated to be robust, and commercial oil stocks in the OECD fell further in August and the difference to the latest five-year average has been reduced by 168 million barrels since the beginning of this year.
However, according to the report, there remains another 170 million barrels of stock overhang to be depleted. Supported by the improving forward structure in the futures market, floating storage has also been on a declining trend since June.
“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,” the statement ended.
According to Reuters, Brent oil price reached an eight-month high on Monday at $57.75 a barrel, its highest since January 3, boosted by the news of market rebalancing and threats by Turkey it would put a stop to oil flows from Iraq’s Kurdistan region to Turkish ports over the Kurds’ independence referendum.
The Iraqi Kurds are voting to become independent from Baghdad, and Istanbul is concerned its own Kurdish minority might follow a similar practice.
Offshore Energy Today Staff