London — That’s what analysts at investment bank Jefferies stated in a new research note sent to Rigzone on Friday.
In the note, the analysts highlighted that a statement from the September 12 OPEC+ joint ministerial monitoring committee (JMMC) meeting “essentially called out the cheaters” and urged all countries to conform with their targets.
“The JMMC indicated that total conformity was high at 136 percent in August, but data from OPEC secondary sources and the IEA indicates that conformity had fallen to 109 percent,” the analysts stated in the note.
“Among the largest producers, Iraq and Nigeria are each not only well out of compliance but producing above their pre-cut reference levels. Russia only delivered about half its cut in August as well,” the analysts added.
“The cordial statement assured that the non-conforming producers would achieve conformity for the remainder of the year, but we question if the Saudis are running out of patience with the free riders,” the analysts continued.
In the JMMC statement, which was posted on OPEC’s website on Thursday, the committee urged all participating countries to “intensify their efforts in pursuit of full and timely conformity with their voluntary production adjustments”.
The committee also emphasized that cooperation and commitment were “more essential than ever” in the statement.
Earlier this week, Rystad Energy noted that a balanced oil market in 2020 is contingent on an extension of OPEC cuts through 2020. Back in July, a research note from Jefferies expressed that OPEC+ cuts will need to be extended through 2020 to keep the market in balance.
The next meeting of the JMMC is currently scheduled to take place on December 4 in Vienna, Austria. An OPEC conference is scheduled for December 5 and an OPEC and non-OPEC ministerial meeting is scheduled for December 6.
*Andreas Exarheas – [email protected]