The OPEC+ alliance’s key monitoring committee will convene virtually on Aug. 3 to assess the impact of the group’s deep production cuts on the oil market, three sources told S&P Global Commodity Insights.
The 23-country alliance has implemented some 4.7 million b/d in cuts since October, in a bid to overcome market concerns over global economic weakness. Platts, part of S&P Global, assessed Dated Brent at $80.37/b on July 13, the benchmark’s highest since late April.
The nine-member Joint Ministerial Monitoring Committee, co-chaired by Saudi Arabia and Russia, is empowered to make policy recommendations and call for emergency meetings of the wider group if needed. The committee is scheduled to meet roughly every two months, and delegates said the Aug. 3 date was finalized on July 13.
The full alliance is next scheduled to meet on Nov. 26.
The group announced it was slashing production quotas by 2 million b/d in October, citing the risks of recessions in key consuming economies. Then in February, Russia said it would lower its output by 500,000 b/d in retaliation for price caps imposed by the G7 over its invasion of Ukraine.
Saudi Arabia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, Oman, and Gabon then announced on April 2 that they would make 1.2 million b/d in voluntary additional cuts through the end of 2023, with Saudi Arabia doubling down in June, with a commitment for a unilateral 1 million b/d cut for July, which has since been extended through August.
Russia has also said it will make a further 500,000 b/d reduction in its crude exports for August, and Algeria will join in with an extra 20,000 b/d cut.
An Aug. 3 meeting of the JMMC would allow Saudi state-run giant Aramco to adjust its September crude allocations to customers and set its OSPs, which it typically does around the 5th of each month for the month ahead if any changes to the kingdom’s production levels are decided.
Aramco OSPs are seen as a bellwether for how the world’s largest crude exporter views market conditions ahead, and many other Middle East NOCs set their OSPs using Aramco’s as guidance.
It comes as OPEC’s own analysis, released July 13, predicts a much tighter oil market in the coming months, with global oil demand seen rising 1.2 million b/d in the second half of 2023 compared to the first.
Source: Hellenic Shipping News
