Kuwait oil minister optimistic markets will slowly rebalance – OPEC, non-OPEC exceed targeted output cuts: Al-Marzouq

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KUWAIT CITY, June 22, (Agencies): Kuwait’s Oil Minister Essam Al-Marzouq said on Thursday that he was optimistic that oil markets will gradually return to balance supported by the record compliance with the oil supply-cut pact by OPEC and non-OPEC.

Says OPEC and non-OPEC oil producers reached the highest compliance level in May with their production cuts, achieving a level of 106 percent and urges other oil producers to do more to make the production cut agreement successful.

Kuwait heads a Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), which includes Russia, Oman, Algeria, and Venezuela.

The next JMMC Meeting is scheduled to be held in St Petersburg, Russia, on July 24, 2017.

OPEC and non-OPEC agreed last year to cut oil output by 1.8 million barrels per day for six months from Jan 1. The oil producers decided last month to extend the production cuts the for another nine months until March 2018.

Independent

Kuwait’s oil minister said Thursday that OPEC and independent producers have exceeded their targeted oil output cuts, but without stemming a decline in commodity prices.

“The commitments to production cuts in May reached 106 percent, the highest percentage since the start of output reductions in January,” said Essam Al-Marzouq, who heads a joint ministerial committee overseeing adherence to the cuts.

Producers agreed last year to slash output by 1.8 million barrels per day for six months, starting January 2017, to help the sector cope with a supply glut that has dented prices.

In May, when the total cuts surpassed the agreed target, the producers decided to extend the reduction deal for another nine months until March 2018.

But oil prices have fallen, with North Sea Brent crude dropping below $45 a barrel for the first time in seven months and West Texas Intermediate settling at just above $42 a barrel — their lowest levels since last August.

Oil prices had recovered to above $55 a barrel after the OPEC and non-OPEC output deal.

OPEC and participating non-OPEC producing countries recorded the highest conformity ever with their voluntary adjustments in production, achieving a level of 106 percent, the organization reported.

The Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) affirmed the adherence to the production ceiling, based on a report by the Joint OPEC-Non-OPEC Technical Committee (JTC) for May 2017.

The JMMC was established following OPEC’s 171st Ministerial Conference Decision of Nov 30, 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on Dec 10, 2016 at which 11 non-OPEC oil producing countries cooperated with the 13 OPEC Member Countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in combined production of around 1.8 million barrels per day.

The resulting declaration, which came into effect on Jan 1, 2017, is for six months, and is extendable for an additional six months, depending on the status of supply and demand, including global inventories.

The second joint OPEC-non-OPEC Producing Countries’ Ministerial Meeting, held on May 25, 2017, decided to extend the voluntary production adjustments for another nine months commencing July 1, 2017.

The JMMC expressed great satisfaction that overall conformity levels by OPEC and participating non-OPEC producing countries have steadily increased from January to May 2017, exceeding 100 percent in both April and May to reach its highest level since January 2017.

In May 2017, the OPEC and participating non-OPEC producing countries achieved a conformity level of 106 percent, an increase of 4 percentage points over the April 2017 performance. This is a convincing demonstration of the willingness of all participating countries to continue their cooperation until the set goal is achieved.

The JMMC took note of the recent market development and expressed confidence that the oil market is moving in the right direction towards the achievement of the objectives of the Declaration of Cooperation, and further encouraged all participating countries to press on towards full conformity and maintain this level for the benefit of producers and consumers alike, as has been consistently advocated.

The next JMMC Meeting is scheduled to be held in St Petersburg, Russia, on July 24, 2017.

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