*Welcomes NNPC’s Sylva to JMMC meeting
Lagos — The Organization for the Petroleum Exporting Countries, OPEC, has signaled further cuts in the ongoing Declaration of Cooperation, DoC despite speculations it may soon retire the plan, urging members to be “courageous”.
In his remarks at the group’s 16th Joint Ministerial Monitoring Committee, JMMC meeting on Thursday in Abu Dhabi, UAE, Secretary-General, Mohammad Barkindo urged OPEC to brace up for the challenge and be “disciplined”.
“Be courageous and discipline yourself. Work. Keep digging your well….Keep knocking and the joy inside will eventually open a window and look out to see who’s there….There’s courage involved if you want to become truth,” he said in a speech obtained by SweetcrudeReports.
According to him, abiding with the cut deal took what he described as “courage”.
“Be courageous and discipline yourself. Work. Keep digging your well….Keep knocking and the joy inside will eventually open a window and look out to see who’s there….There’s courage involved if you want to become truth.”
“The DoC took courage. Rather than choose going it alone; we chose cooperation. Rather than giving up when the odds seemed stacked against us; we chose compromise and perseverance. Consistently, we reaffirmed our faith in the principles at the root of the multilateral order: equity, transparency and fairness”.
He revealed that there would be “intensified dialogues” going forward.
“We have deepened the roots of this Cooperation through the ‘Charter of Cooperation,’ which provides an institutional framework for our continued and intensified dialogue going forward”.
OPEC+ cuts have seen prices rise to $80 per barrel at some point after one of the worst price crash to $30 per barrel in 2015. Price had edged a little above $60p/d on Tuesday.
The cuts which have Russia as a major partner, started in 2015, and has continued, and in a way, helped by US sanctions on Iran and Venezuela.
Although deepening cuts would harm its market quotas however, OPEC seems ready to boost prices and cut global supplies worsened by the U.S shale producers.
OPEC’s global crude market share has since gone from a peak of 35 percent in 2012 to 30 percent as of July 2019.
Although previous supply cuts had shot up prices however, with prices continuously sliding lower, analysts wonder if cuts will now go below the 1.2 million barrels per day agreed in June.
The new factor to discuss at the meeting will be the impact of the trade dispute between the world’s two biggest economies, the US-China trade war.
Apart from low output from Iran and Venezuela, production in the US has also slowed.
OPEC production is currently at a 15-year low, having fallen by 2.7 million barrels per day over the past nine months, according to a statement by Standard Chartered last month.
“We think that the oil policy options for key producers are limited, for the moment,” the bank said.
Even as speculation arises that OPEC+ might need to cut an additional one million bpd to stabilize the market, the challenge might be which country would agree to cut, since Saudi Arabia is already cutting beyond its agreed quotas.
Meanwhile, the OPEC Chief, seized the opportunity to welcome Nigeria’s new Minister of State for Petroleum Resources, Timipre Sylva to the JMMC meeting for the first time.
He affirmed his optimism on Timipre’s ability to make substantial contributions to the group.
“I would also like to add my words of welcome to HE Timipre Sylva, Nigeria’s new Minister of State for Petroleum Resources. This is the Minister’s first meeting since taking up his new assignment and I am sure he will make a terrific contribution to our Committee and our Organization”, Barkindo said.
Nigeria, just like other OPEC members rely on oil exports to generate enough money to grow their economy.
The country based her over N8 trillion2019 national budget on a price of $60p/b and target of 2.3million barrels per day, although OPEC pact allows nothing more than 1.7 million barrels per day.
Deepening cuts means countries pledged to the cuts could likely have less output.