Opec’s Joint Ministerial Monitoring Committee (JMMC) reaffirmed its commitment to achieving a balanced market and working towards oil market stability on a sustainable basis with solid fundamentals at its 14th meeting in Jeddah, Saudi Arabia yesterday (May 19).

The JMMC expressed its satisfaction regarding the critical role which the ‘Declaration of Cooperation’ (DoC) played in the oil market recovery seen in the first quarter of 2019 compared to the fourth quarter of 2018, supported by high conformity to the voluntary production adjustments by participating countries.

Conformity for the month of April 2019 was 168 per cent, and this record high figure has also had positive ramifications for global economic growth in the first four months of 2019. Average conformity has reached 120 per cent since January 2019.

The Committee noted that an agile and flexible approach has been critical to the success of the DoC to date and will be key going forward. Since the DoC was signed on 10 December 2016, the partners have been able to adapt course depending on market conditions.

In analyzing current oil market conditions and macroeconomic developments, the Committee also recognized that critical uncertainties remain, including ongoing trade negotiations, monetary policy developments and geopolitical challenges.

“The net results of supply and demand variations shows in the key metric of inventories which is the critical factor we watch closely.  Here again, the picture is rather murky,” said Khalid A Al-Falih, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and chairman of the JMMC.

“US inventories continue to rise.  OECD stocks are still above the last five years’ average –and that is relatively elevated compared with levels seen in normal years because of excess inventories of recent years. Non-OECD inventories are also rising. The bottom line is that none of us wants to see the stocks swell again, so we have to be cautious. It is one of our most critical priorities.”

The JMMC requested that the Joint Technical Committee and the Opec Secretariat continue to monitor and analyze oil market developments and, particularly, oil inventory projections in the coming weeks with a view to the next JMMC meeting making a recommendation to the Opec Conference and Opec and non-Opec Ministerial Meeting, which are scheduled to meet in June 2019, regarding appropriate actions on the part of participating countries for the second half of 2019.

The JMMC expressed its appreciation for the excellent logistical arrangements for the meeting and thanked Khalid A Al-Falih for his gracious hospitality, as well as commending all officials and representatives from Saudi Arabia and the Opec Secretariat who were involved in organizational matters.

The 15th JMMC Meeting is scheduled to take place in June 2019 at the Opec Secretariat in Vienna, Austria. – TradeArabia News Service