OPEC and Non-OPEC oil production cuts at record highs

OPEC and Non-OPEC countries participating in voluntary production cuts have achieved record-breaking levels of conformity with production adjustments during December 2017.

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) said on Sunday, January 21, that the conformity level for the month was 129%. This was based on the report of the Joint OPEC-Non-OPEC Technical Committee (JTC).

The JMMC convened for the seventh time on Sunday, this time in Muscat, Oman. The Committee said that the monthly average conformity level for the first year of the Declaration of Cooperation was 107%.

The JMMC was established following OPEC’s 171st Ministerial Conference Decision on November 30, 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on December 10, 2016.

At the time 11, now 10, non-OPEC oil producing countries cooperated with the 13, now 14, OPEC member countries to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day.

The resulting declaration, which came into effect on January 1, 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on May 25, 2017, decided to extend the voluntary production adjustments for another nine months commencing July 1, 2017.

At the third joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on November 30, 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.

According to OPEC, conformity levels have increased on a monthly basis, from 87% in January to the outstanding current level of 129%.

The JMMC expressed satisfaction with the overall results and urged all participating countries to continue and, to the extent possible, intensify their collective and individual efforts, in the interests of bringing stability to the oil market.

According to the JMMC, recent data confirmed that global oil demand growth would continue on a positive trajectory in 2018, buoyed by the strong performance of the global economy.

The next JMMC Meeting is scheduled to be held in April 2018 in Saudi Arabia.

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