OPEC, allies agree not to further increase oil production

Lloyd Doyle
September 24, 2018

Word has gotten out that the JMMC, operating beyond its mandate, is to provide a figure for increasing oil supply under the pretext of the so-called "offsetting shortages caused by Iran's Production Reduction'".

"It is critical that we continue to foresee and anticipate changing market supply and demand balances and take proactive actions to avoid conditions that could make (oil) consumers uneasy and anxious", said Falih, who chairs the joint committee of OPEC and non-OPEC countries.

Seeking to reverse a downturn in oil prices that began in 2014, Opec, Russia and other allies decided in late 2016 to reduce supply by some 1.8 million barrels per day.

Russia's energy minister Alexander Novak on Sunday appeared to back a continuation of the partnership between OPEC and non-OPEC member states.

"It's premature to say what we're going to do in 2019", he added.

Iran is expected to lose some 1.4 million barrels-per-day of supply as U.S. sanctions go into force November 5, while Venezuela and Libya also present supply risks, pushing up cost, according to market analytics firm S&P Global.

"Decisions can only be made at OPEC meetings in the presence of all OPEC members and by consensus of members", he noted.

"Oil demand will be declining in the fourth quarter of this year and the first quarter of next year".

The next OPEC meeting isn't set until early December, where the discussion docket will again not include a production hike.

OPEC put Iran's current production at 3.58 million bpd, down some 300,000 bpd from the start of the year, according to OPEC's secondary sources such as researchers and ship-trackers.

"They are sacrificing OPEC, they are destroying OPEC and slowly, without directly saying so, they want to gather some names together to create a forum to replace OPEC and manage the market", Zanganeh told Platts.

Al Falih said returning to 100 per cent compliance was the main objective and should be achieved in the next two to three months.

Although he refrained from specifying how that could be done, Saudi Arabia is the only oil producer with significant spare capacity.

While viewing high demand as healthy, the organisation noted that the trend was fuelled by developing countries undergoing major demographic and general economic expansion.

Trump however, wants output increased by as much as two million barrels per day, as oil prices continue to rise in the United States amid high consumer demand.

The OPEC/non-OPEC monitoring committee next meets on November 11 in Abu Dhabi, followed by a full OPEC gathering at its Vienna headquarters on December 6-7.

Other reports by Iphone Fresh

Discuss This Article