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The Organisation of Petroleum Exporting Countries (OPEC) and its allies called OPEC+ has requested the Joint Technical Committee (JTC) to closely monitor the implementation of the required compensation of oil production cut by the underperforming participating countries.
OPEC+ made this known at the end of its 20th virtual meeting of the Joint Ministerial Monitoring Committee (JMMC) under the Declaration of Cooperation (DoC), in Vienna.
A statement by the committee on its website also requested the OPEC secretariat to join in monitoring the performance and report to the JMMC.
The committee urged underperforming participating countries to submit their plan for implementation of the required compensation for June to the OPEC secretariat by the end of July 2020.
The body welcomed the participation of Angola, Gabon, South Sudan and Congo and noted that they had pledged their commitment to the DoC production adjustments and compensation plans.
It noted that conformity to the production cut deal by participating countries stood at 107 per in June and commended Saudi Arabia, the United Arab Emirates and Kuwait for their additional voluntary contributions made in June.
The committee noted that removing the credit for over conformity resulted in a conformity level of 95 per cent in June, the highest since the inception of the DoC in January 2017.
It highlighted the importance of the DoC in supporting oil market stability and reiterated the historic decision taken by all participating countries in the DoC.
The committee reviewed and reaffirmed the commitment of all participating countries to achieve full conformity and make up for any shortfall under compensation plans, presented to it.
The body stated that achieving 100 per cent conformity from all participating countries was not only fair, but vital for the ongoing rebalancing efforts and to help deliver long term oil market stability.
The OPEC+ committee observed that there were encouraging signs of improvement as economies around the world opened up.
“While there could be localised or partial lockdowns re-imposed in some places, the recovery signs were clear, both in physical and futures markets.
Moving to the next phase of the agreement, the extra supply resulting from the scheduled easing of the production adjustment would be consumed as demand recovers, it noted.
The committee said that the seasonality was more pronounced this year, due to the pandemic, noting that for many DoC participants, there would be an increase in demand for utilities, as well as changes in travel patterns.
This, it said, would boost domestic demand for gasoline and diesel and as a result the impact on DoC participating countries’ exports that would be limited.
The committee maintained that the compensation schedule that had been agreed by participating countries would mean that the effective level of adjustments would be deeper.(NAN)