PREVIEW - OPEC+ Meetings On Oil Output Cuts Deal To Start This Week

MOSCOW (Pakistan Point News / Sputnik - 17th August, 2020) The OPEC+ Joint Technical Committee (JTC) will convene virtually on Monday in order to assess oil market conditions and come up with recommendations for the following meeting of Joint Ministerial Monitoring Committee (JMMC).

At the JMMC meeting, the participants will discuss whether the easing of oil cuts to 7.7 million barrels a day (mbd) starting from this month is enough to keep the energy market stabilized.

So far, there have been no proposals to change the conditions of the OPEC+ deal, reached in April, under which the 7.7 mbd cuts should be in force until the end of the year, according to Russian Energy Minister Alexander Novak.

Also on the agenda of the ministerial committee is monitoring the OPEC+ compliance with the production quotas. Some countries, such as Iraq, have a record of non-compliance with the deal. In July, Iraq again failed to achieve full conformity. However, Baghdad has pledged to reduce production by 400,000 barrels per day in the months of August and September to offset overproduction in the last three months.

Even though the JMMC meeting was initially slated for Tuesday, it might be pushed back by a day, to August 19, the Russian Energy Minister said last week. A final decision has not been announced yet.

In anticipation of the OPEC+ meetings, OPEC has urged the participants of the April agreement and other oil producers to keep cutting the oil output despite some signs of economic recovery across the globe as possible second wave of COVID-19 and packed oil inventories remain as a risk.

At the same time, the oil prices have been falling slightly by the end of last week. On Friday evening, the price of October futures for Brent dropped by 0.5 percent to $44.73 per barrel, while September futures for WTI depreciated by 0.6 percent to $41.98 per barrel.