The Opec+ Joint Ministerial Monitoring Committee (JMMC) meeting has concluded with no recommendation for crude production policy beyond the decisions of last month's Opec+ meeting.
The JMMC, which monitors compliance with the Opec+ deal, did not discuss rising crude output from Libya or the prospect of increased production from Iran. Both countries, alongside Venezuela, are exempt from current production restraints.
The committee reviewed the market impact of last month's Opec+ decision to increase official collective crude production by 75,000 b/d in February and another 75,000 b/d in March, split between Russia and Kazakhstan. Saudi Arabia also pledged to make a voluntary cut of 1mn b/d below its 9.119mn b/d quota in February and March.
The JMMC stressed the importance of "accelerating market rebalancing without delay". It said that Opec+ members which form part of the production restraint agreement have pledged to "achieve full conformity and make up for previous compensation shortfalls."
The JMMC praised Nigeria's efforts to comply with its December quota, although the country's output was largely constrained in December by a gas explosion that rocked the Qua Iboe terminal.
Coalition members exceeded their quotas by a collective 2.685mn b/d in the May-December period — this is not a monthly average, but a total of the monthly amounts by which signatories to the agreement have surpassed their respective targets.
It is equivalent to nearly 81mn bl of overproduction and compares with a combined 2.461mn b/d of overproduction — or around 74mn bl — that had accumulated in the May-November period, according to a document seen by Argus.
Countries party to the deal which have previously overproduced have until the end of April to compensate, a deadline which has been repeatedly pushed back. Opec+ must also monitor output levels of crude-producing countries outside the alliance, Russia's deputy Prime Minister and JMMC co-chair Alexander Novak said today.
Coalition members are likely to face more difficult challenges in the lead up to the next JMMC meeting on 3 March, and the subsequent Opec+ meeting on 4 March, although Saudi Arabia's voluntary 1mn b/d reduction pledge has bought the group time to assess market developments.
Today's JMMC concluded that economic prospects and oil demand will remain uncertain in the coming months, despite the "positive factor" of a gradual Covid-19 vaccine roll-out. Novak struck a more upbeat tone, saying there was growing public optimism about the prospects of global oil demand recovery as a result of vaccination programmes and improving macroeconomics.
But the alliance will have to decide next month how and whether to amend production quotas going forward, a decision which has been far from smooth-sailing in the two previous Opec+ meetings.
