LONDON, Oct. 25, 2017 - OPEC and participating non-OPEC producing countries have achieved a record high level of compliance with their agreement to voluntarily cut production, according to the joint ministerial committee responsible for monitoring the agreement.
The Joint Ministerial Monitoring Committee (JMMC) said that for the month of September, conformity levels reached 120 percent, the highest level since adoption of the Declaration of Cooperation, which called for voluntary production cuts to accelerate the stabilization of the oil market. OPEC and participating non-OPEC producing countries have achieved a record high level of compliance with their agreement to voluntarily cut production, according to the joint ministerial committee responsible for monitoring the agreement.
Mohammad Sanusi Barkindo, OPEC secretary general, applauded the declaration’s progress at the Oil & Money conference last week in London.
“There is no doubt that the market is rebalancing at an accelerating pace. Stability is steadily returning, and there is far more light at the end of the dark tunnel we have been travelling down for the past three years,” Barkindo said. “Together with our friends from non-OPEC, we definitely turned an historic page … and today we are helping write a new chapter of sustained stability in the global oil industry.”
Reaching and exceeding the conformity level for the declaration, which went into effect in January, underscores the commitment of participating producing countries to cooperate towards the rebalancing of the market, OPEC said. 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 have yet to achieve 100 percent conformity.
The JMMC also 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 among the 35 nations in the Organization for Economic Co-operation and Development fell further in September and the difference with the latest five-year average has been reduced by 178 million barrels since the beginning of this year. However, OPEC said, there remain another 159 million barrels of stock overhang to be depleted.
The JMMC said it will continue to monitor other factors in the oil market and its influence on the ongoing market-rebalancing process.
The next JMMC Meeting is scheduled to be held in Vienna on Nov. 29.