OPEC+ has encouraging signs of rising conformity, said Mohammad Sanusi Barkindo, OPEC Secretary General, at the 7th Technical Meeting of OPEC and non-OPEC Countries under the DoC, 4 June 2020, via videoconference, Trend reports.
“Production adjustments as agreed at the 9th and 10th (Extraordinary) OPEC and non-OPEC Ministerial Meetings on 9 and 12 April 2020 have set us on a course to aid in restoring stability to an energy market that was in drastic need of it,”
noted OPEC’s secretary general.
He recalled that downward adjustments in overall crude oil production by 9.7 mb/d started on 1 May 2020, for an initial period of two months, with a subsequent adjustment for 6 months of 7.7 mb/d, followed by a 5.8 mb/d adjustment for a period of 16 months, to 30 April 2022.
“With the DoC decision as an anchor, the market-driven shutdown of millions of barrels of production in North America, and further commitments from several DoC participants, the oil market has started to veer back on course. The emerging production profile shows encouraging signs of rising conformity by DoC countries, at great cost to their local industries and countries. This speaks volumes about the dedication of our group,” said Barkindo.
He pointe out that a month after the implementation began of the largest-ever internationally coordinated production adjustments, oil has responded swiftly and positively.
“The physical market has tightened and prices have recovered somewhat. Storage tanks are not filling as rapidly, and previously wide differentials between near and forward months are narrowing,” said OPEC secretary general.
He pointed out that demand is already rebounding in some of the world’s biggest energy consumers.
“But we cannot be complacent. The recovery remains tentative, and continued rebalancing of shattered markets will continue to require both a strong recovery in demand and the determined implementation of pledges made.”
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