JMMC unlikely to recommend Opec+ policy change

The Opec+ Joint Ministerial Monitoring Committee (JMMC) is unlikely to suggest any changes to the group's production policy when it meets to assess oil market fundamentals next week, delegates told Argus.

With many of the uncertainties that underpinned the group's December decision to roll over crude output quotas still at play, and oil prices looking strong, delegates say the JMMC, which is due to meet on 1 February, will probably not recommend anything other than a continuation of current policy and no change to production targets.

"We still have a lot of the same uncertainties," one delegate said. "So, there is no need for any changes." A second delegate said there is nothing to suggest a change in policy is needed, or imminent.

The JMMC, which is made up of key Opec+ ministers, is not a decision-making body but it does make recommendations based on its assessment of the market. Opec+ is not due to hold a ministerial conference until June — in theory, the only arena in which a decision to amend production policy can be taken. But should the JMMC decide that a change in policy is required, it has the authority to recommend an extraordinary ministerial meeting be held to discuss potential future steps.

At their last meeting in December, Opec+ ministers opted to roll over the nominal 2mn b/d cut to output targets that they agreed back in October. Delegates argued at the time that the many uncertainties facing the market, not least around the EU's then-looming embargo on Russian seaborne crude imports, made this the most prudent course of action. Speaking in Abu Dhabi earlier this month, the UAE's energy minister Suhail al-Mazrouei said he felt the December decision had since contributed to the "stabilisation" of the market.

Despite a sharp sell-off in the days that followed the December meeting, oil prices have been on a steady upward trajectory since, with front-month Ice Brent crude futures clawing back all the post-meeting losses. The front-month Brent contract was just over $87/bl at 17:12 GMT today, more than $10/bl above where it was in early December.

By Nader Itayim