JMMC postpones output recommendation till June

A meeting of the Joint Ministerial Monitoring Committee (JMMC) grouping nine members of Opec and allied producing nations — known as Opec+ — ended in Jeddah without making any formal output recommendation to the 24-member group, citing "uncertainties" besetting the market.

The JMMC will meet in the days before the end-June full ministerial meeting to review scenarios and prepare a final proposal.

The communique issued after the meeting referred to "critical uncertainties" affecting markets and macroeconomics, including the ongoing trade dispute between the US and China, monetary policy and "geopolitical challenges".

At the press conference following the meeting, Saudi oil minister Khalid al-Falih noted that there was a general consensus for keeping the current Opec+ agreement in place during the second half of this year to allow global stocks to gradually drain, but added that the group could decide to make changes to the agreement and ease the output restrictions if the market required.

The meeting asked the Opec+ Joint Technical Committee (JTC) and Opec secretariat to continue monitoring and analysing oil market developments, particularly oil inventory projections, and report to the JMMC when they next meet in Vienna, ahead of the 25-26 June Opec and Opec+ meetings.

The JMMC put overall conformity with the production cut agreement at a record high 168pc in April, and 120pc on average in the first four months of the year.

Al-Falih also moved to reassure consumers that Saudi Arabia would stand ready to quickly increase output to meet additional consumer demand if requested, pointing to the fact that Saudi oil output in April and May stood at "around 9.7-9.8mn b/d," some 500,000 b/d below RIyadh's 10.3mn b/d production cap under the Opec+ agreement. He said that volume could be made quickly available to consumers and was "a large amount of oil."