TheCable

Oil prices jumped to $54 per barrel early Thursday as the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) reported that the oil deal struck in 2016 hit a 102 percent conformity level.

Based on the Report of the Joint OPEC-Non-OPEC Technical Committee (JTC) for the month of April 2017, OPEC and participating Non-OPEC producing countries have shown steady and convincing progress towards full conformity with their respective adjustments in production.

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 the meeting 11 non-OPEC oil producing countries cooperated with the 13 OPEC Member countries in an effort to accelerate the stabilization of the global oil market through adjustments in oil production of around 1.8 million barrels per day.

The resulting framework, which came into effect in January 2017, is for six months, and is extendable for an additional six months, depending on the status of supply and demand, including global inventories.

As of April 2017, the OPEC and participating non-OPEC producing countries achieved an impressive conformity level of 102 per cent, an increase of 4 percentage points over the March 2017 performance.

“This is a demonstration of the commitment of participating countries to continue their cooperation until the achievement of the goal of rebalancing the market,” OPEC secretariat said in a statement.

“The JMMC expressed great satisfaction with the results and steady progress made towards full conformity of the production adjustments, and encouraged all participating countries to achieve full conformity.

“Next, the JMMC took note of the current market conditions, including the level of global inventories, and concluded that it is necessary to extend the production adjustments. The Committee also took note of the fact that the duration of the anticipated extension should be longer than the originally stated period in the Declaration of Cooperation of six months.

“The JMMC then considered several scenarios presented by the JTC regarding the extension of the Declaration of Cooperation and decided to recommend that the production adjustments of the participating countries be extended for nine months commencing 1 July 2017.

“In this regard, the JMMC should continue monitoring conformity levels as well as market conditions and immediate prospects, and recommend further adjustment actions, if deemed necessary. Furthermore the JTC, supported by the OPEC Secretariat, will continue to provide its monthly technical assistance to the Bodies of the Declaration of Cooperation.

“This recommendation reaffirms the commitment of OPEC and participating non-OPEC countries to continue to cooperate for the benefit of producers and consumers alike, as has been consistently advocated.”

It was agreed to hold the next JMMC meeting in the Russian Federation in July 2017.