The joint ministerial monitoring committee for the Organisation of Petroleum Exporting Countries and non-OPEC oil producers participating in the production cut deal has said it will invite representatives from Nigeria and Libya to its next meeting in September to explain their production outlooks.
The deal, which began on January 1 and called on OPEC countries and 10 non-OPEC producers led by Russia to cut a combined 1.8 million barrels per day in supplies, was in May extended by nine months to March 2018.
The JMMC said at the end of its meeting on Thursday that efforts by OPEC and participating non-OPEC producing countries had continued to show positive results towards the goal of rebalancing the oil market.
The President of the OPEC Conference, Khalid Al-Falih, at the 4th meeting of the JMMC in St. Petersburg, Russia, said since the last gathering, they had witnessed continued pressure on the market, underpinned uncertainty about supply-demand developments. He said oil demand was picking up, from moderate growth of one million barrels per day in the first quarter of the year to 1.5 million in the second quarter, including rising demand growth in the key consuming markets of China, India and the United States.
“Despite the positive indicators, we must acknowledge that the market has turned bearish with several key factors driving this behaviour: reported compliance not matching export figures, increased Libyan and Nigerian production, the US shale forecasts, and finally, the outlook past the March 2018 expiry date of our agreement,” he said.
Al-Falih said although conformance with the production agreement remained strong at the aggregate level, some countries continued to lag.
He said, “The other major issue that markets are focused on is the expansion of supplies from Nigeria and Libya, both of which have been exempted from our agreement; and of course, we remain supportive of our partners in both nations as they work on the recovery of their industries and economies.
“The committee, however, should monitor the impact of such growth on global supply-demand balances.”
Nigeria and Libya, which were exempt from the cuts as they dealt with internal unrest, have ramped up production significantly in the last few months as their security situations have improved.