Abu Dhabi: The UAE, Iraq, Kazakhstan and Malaysia have expressed their willingness to fully comply with the production cut agreement reached between Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members last year, Opec said after the Joint Opec-Non-Opec Technical Committee (JTC) meeting in Abu Dhabi on Tuesday.
The meeting was called to further improve conformity levels with the production cut deal reached between Opec and non-Opec members last year to accelerate the rebalancing of the global oil markets.
Thirteen members of the Opec and 11 non-Opec members agreed to cut production by about 1.8 million barrels a day to prop up oil prices in December last year.
The initial agreement, which came into effect from January 1 this year, was for six months. It was further extended until March next year. Libya and Nigeria were exempted from the deal.
“Discussions were conducted in a constructive atmosphere and proved fruitful. The conclusions reached with the countries at the meeting will help facilitate full conformity with the Declaration of Cooperation, which participating countries remain steadfast in their commitment to fulfil,” Opec said in a statement.
“The UAE, Iraq, Kazakhstan, and Malaysia all expressed their full support for the existing monitoring mechanism and their willingness to fully cooperate with the JTC and JMMC (Joint Opec-Non-Opec Ministerial Monitoring Committee) in the months ahead in order to achieve the goal of reaching full conformity.”
The extraordinary meeting of the JTC was co-chaired by Kuwait and Russia, in the presence of Saudi Arabia, the Opec Conference President.
The statement also said the session was held in Abu Dhabi in view of the UAE’s upcoming presidency of Opec in 2018 and signals the country’s strong and firm commitment to the full and timely implementation of the production adjustments by Opec and participating Non-Opec producing countries.
Ole Hansen, head of commodity strategy at Saxo Bank said Opec and non-Opec compliance slipped in June in response to cheating from countries led by Iraq.
“This development together with rising Libyan production helped send the price lower before rallying when Saudi Arabia back in July announced a cut in shipments for August. The impact of this announcement together with the ongoing fall in US inventories and stabilising rig count has supported the recent price recovery.”
He said rising Libya production poses a problem for the speed of the rebalancing but so far this month these concerns have been reduced due to fall in US inventories and Saudi cutting shipments.
“We maintain a third quarter peak of $55 (Dh202) per barrel on Brent crude with the market unlikely to rally further at this stage.”
International benchmark Brent was trading at $52.07 per barrel at 8.53pm UAE time, down by 0.57 per cent.
