OPEC+ Reiterates Commitment to Ease Output Gradually
The Organisation of Petroleum Exporting Countries and allies (OPEC+) meeting has reaffirmed the prior decision to incrementally ease output till the next meeting on July 1, noted that a stable global market is in the mutual interest of producing countries.
The 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, held the 17th Ministerial Meeting via videoconference.
The group had agreed to raise its production by 350,000 barrels per day (bpd) in May and June and 400,000 bpd in July.
Saudi Arabia’s additional production cut of 1 million bpd would also be gradually phased out with a production increase of 250,000 bpd in May, 350,000 bpd in June and 400,000 bpd in July.
With the new output quota, the group’s collective production will reach 5.8 billion bpd in July.
In a statement released after the meeting, the group said the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement.
It added that the Organisation for Economic Cooperation stocks slowed down as global economic recovery continued in most parts of the world as vaccination programmes accelerated.
The meeting noted that overall conformity to the production adjustments was 114% in April, reinforcing the trend of high conformity by participating countries.
After the meeting, the group said in a statement that in view of current oil market fundamentals and the consensus on its outlook, the meeting reaffirmed the existing commitment of the participating countries in the Declaration of Cooperation (DoC) to a stable market in the mutual interest of producing nations.
It emphasize the efficient, economic and secure supply to consumers; and a fair return on invested capital.
The group said it reconfirmed the existing commitment of the 10th OPEC and non-OPEC Ministerial Meeting in April 2020, amended in June, September, and December 2020, as well as in January and April 2021 to gradually return 2 million barrels a day (mb/d) of the adjustments to the market, with the pace being determined according to market conditions.
It will be recalled that Brent oil advanced above 70 dollars a barrel after the OPEC+ alliance forecast a tightening global market ahead its meeting
The meeting reiterated the critical importance of adhering to full conformity, and taking advantage of the extension of the compensation period until the end of September 2021asrequested by some underperforming countries.
It added that compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
It further reconfirmed the decision made at the 15th OPEC and non-OPEC Ministerial Meeting with regards to production adjustments for the month of July 2021, given the observed market fundamentals. It also emphasised the need to continue to consult and closely monitor market fundamentals.
According to it, to also maintain the monthly OPEC and non-OPEC Ministerial Meetings until the end of the decision made at the 10th OPEC and non-OPEC Ministerial Meeting on April, 12, 2020.
It noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling as the economic recovery continued in most parts of the world as vaccination programmes accelerated.
The meeting welcomed the positive performance of participating countries in DoC overall conformity to the production adjustments.
OPEC+ Reiterates Commitment to Ease Output Gradually
