*As compliance hits 107 percent in June
Lagos — The Organization of Petroleum Exporting Countries, OPEC and its partners have called for close monitoring of the oil cuts by the Joint Technical Committee, JTC.
In a statement at the end of its 20th virtual meeting of the Joint Ministerial Monitoring Committee, JMMC, the group said a close monitoring will prompt compliance of underperforming participating countries.
The committee maintained that the compensation schedule that had been agreed by participating countries would mean that the effective level of adjustments would be deeper.
The JTC was then charged to report back to the JMMC result of its findings.
Countries who are yet to comply were asked to submit compliance plan for June to the OPEC secretariat by July ending.
The body welcomed the participation of Angola, Gabon, South Sudan and Congo and noted that they had pledged their commitment to the DoC production adjustments and compensation plans.
Production cut deal by participating countries stood at 107 percent in June.
The group commended Saudi Arabia, the United Arab Emirates and Kuwait for their additional voluntary contributions made in June.
The committee noted that removing the credit for over conformity resulted in a conformity level of 95 percent in June, the highest since the inception of the DoC in January 2017.
It highlighted the importance of the DoC in supporting oil market stability and reiterated the historic decision taken by all participating countries in the DoC.
The committee reviewed and reaffirmed the commitment of all participating countries to achieve full conformity and make up for any shortfall under compensation plans, presented to it.
It stated that achieving 100 percent conformity from all participating countries was not only fair, but vital for the ongoing rebalancing efforts and to help deliver long term oil market stability.
The OPEC+ committee observed that there were encouraging signs of improvement as economies around the world opened up.
“While there could be localised or partial lockdowns re-imposed in some places, the recovery signs were clear, both in physical and futures markets.
“Moving to the next phase of the agreement, the extra supply resulting from the scheduled easing of the production adjustment would be consumed as demand recovers, it noted.
The committee said the seasonality was more pronounced this year, due to the pandemic, noting that for many DoC participants, there would be an increase in demand for utilities, as well as changes in travel patterns.
This, it said, would boost domestic demand for gasoline and diesel and as a result the impact on DoC participating countries’ exports that would be limited.