The price of Bonny Light, Nigeria’s premium oil grade, which had risen to $40 per barrel last week, dropped to $38.70 following the prevalence of excess crude in the international market. This was even as the Organisation of Petroleum Exporting Countries, OPEC, emerged with a report, stating that it achieved 87 per cent compliance with its oil cut directive in May 2020.

In a statement obtained by Vanguard, the organisation, stated: “The Committee took note of the overall conformity of 87 per cent for the month of May 2020. “It also observed individual country conformity levels and reiterated the critical importance that all Participating Countries achieve their 100 per cent level, and make up for any monthly shortfalls in the months of July, August, and September.

“It welcomed the expressed commitments from those countries below the 100 per cent May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September. “The Committee emphasized the critical importance of adhering to full conformity, and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the Statement of the 11th OPEC and non-OPEC Ministerial Meeting of the DoC (6 June 2020), in particular with reference to the five elements agreed.”

The organisation, which held its 19th Joint Ministerial Monitoring Committee (JMMC) via videoconference, on Thursday, 18 June 2020, under the Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, and co-Chair HE Alexander Novak, Minister of Energy of the Russian Federation, stated: “The Committee reviewed the monthly report prepared by the Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021.

“The JMMC reiterated the critical role that the ‘Declaration of Cooperation’ (DoC) continues to play in supporting oil market stability and economic recovery, in the face of the COVID- 19 pandemic shock and the subsequent severe global economic downturn.

“In this regard, it recalled the historic decision taken by all Participating Countries in the DoC at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on 12 April 2020 to adjust downwards overall crude oil production, and the decisions taken at the recent 179th Meeting of the OPEC Conference and the 11th OPEC and non-OPEC Ministerial Meeting on 6 June 2020.

“This included extending the first phase of the production adjustments by a further month, now till 31 July 2020, and subscribing to the concept of compensation by those countries who were unable to reach full conformity (100%) in May and June, to accommodate the underperformed volumes in July, August, and September, in addition to their already agreed production adjustment for such months.”

Similarly, it stated: “The Committee would like to thank those participants, namely Iraq and Kazakhstan, which have already submitted their compensation schedules and agreed to give other underperforming participants, which have not yet submitted final plans, until next Monday 22 June 2020 to submit their schedules for compensation to the OPEC Secretariat. “Furthermore, the Committee mandated the Secretariat to reach out to all the underperforming Participating Countries to submit their schedules for compensation by the above mentioned date.

“The Committee stressed that the attainment of 100 per cent conformity from all Participating Countries is not only fair and equitable but vital for the ongoing and timely rebalancing efforts and helping deliver sustainable oil market stability. “The Committee stated their appreciation of additional voluntary contributions totalling 1.2 mb/d made by Saudi Arabia, the UAE, Kuwait and Oman in the month of June 2020.”


Source: Vanguard