TAYO ELEGBEDE
The Joint Ministerial Monitoring Committee (JMMC) of the Organisation of Petroleum Exporting Countries has expressed worry over the fragile state of the oil market.
The JMMC stated this after its 21st meeting held via videoconference presided over by its Chairman and Saudi Arabia’s Minister of Energy.
It said that there are still significant uncertainties particularly associated with demand.
The committee said, “Despite there are some signs of gradual improvement in market conditions, the situation still calls for more vigilance by all participating countries.
“The reversed inventory build in July 2020 and the lessening of the gap between global oil demand and supply is an indication, nevertheless, the pace of recovery appeared to be slower than anticipated with growing risks of a prolonged wave of COVID-19 pandemic.”
The committee revealed significant performance in overall conformity with cut in production quota by participating OPEC and non-OPEC countries of the DoC, recording 97 per cent in July 2020, including Mexico.
The JMMC emphasised that achieving 100 per cent conformity by all participating countries in the DoC and compensating for the shortfalls in May, June and July 2020 is not only fair, but vital for the ongoing rebalancing efforts and to help deliver long-term oil market stability.
The meeting reviewed the monthly report prepared by its Joint Technical Committee (JTC) and developments in the global oil market since its last meeting on July 15, 2020, as well as considered market prospects for the second half of 2020 and 2021.
The Committee emphasised the ongoing positive contributions of the DoC in supporting a rebalancing of the global oil market.
The JMMC members reaffirmed their commitment in the DoC to achieve full and timely conformity, while the underperforming members of the Committee reaffirmed their commitment to compensate for the shortfalls in May, June, July 2020 by the end of September 2020.
It also requested other underperforming participating countries to submit their plans for implementation of the required compensation for the overproduced volumes to the OPEC Secretariat by the end of next week, 28th August, 2020.
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