By Udeme Akpan
THE price of Bonny Light, Nigeria’s premium oil grade has dropped from $74.00 to $73.58 as the Organisation of Petroleum Exporting Countries, OPEC, plans action to achieve market stability.
Vanguard’s survey of the volatile market by showed that there was also a general drop in the prices of other crude oil grades. For instance, the price of Brent and WTI dropped from $73.20 to $72.21 and $63.25 to $62.71 per barrel respectively.
Meanwhile, in a statement sent to Vanguard, yesterday, OPEC stated: “Following its 14th Meeting, which took place on 19 May 2019, in Jeddah, the Kingdom of Saudi Arabia, the Joint Ministerial Monitoring Committee (JMMC) has reaffirmed its commitment to achieving a balanced market and working towards oil market stability on a sustainable basis with solid fundamentals.
“The JMMC expressed its satisfaction regarding the critical role which the ‘Declaration of Cooperation’ (DoC) played in the oil market recovery seen in the first quarter of 2019 compared to the fourth quarter of 2018, supported by high conformity to the voluntary production adjustments by participating countries. Conformity for the month of April 2019 was 168%, and this record high figure has also had positive ramifications for global economic growth in the first four months of 2019. Average conformity has reached 120% since January 2019.
“The Committee noted that an agile and flexible approach has been critical to the success of the DoC to date and will be key going forward. Since the DoC was signed on 10 December 2016, the partners have been able to adapt course depending on market conditions. When the market appeared skewed to oversupply, voluntary production adjustments were adopted and implemented, as was the case in December 2016 and December 2018, and equally, when concerns regarding demand outpacing supply surfaced as the market tightened, as was the case in June 2018, partners in the DoC took appropriate action.
“In analyzing current oil market conditions and macroeconomic developments, the Committee also recognized that critical uncertainties remain, including ongoing trade negotiations, monetary policy developments and geopolitical challenges. The JMMC requested that the Joint Technical Committee and the OPEC Secretariat continue to monitor and analyze oil market developments and, particularly, oil inventory projections in the coming weeks with a view to the next JMMC meeting making a recommendation to the OPEC Conference and OPEC and non-OPEC Ministerial Meeting, which are scheduled to meet in June 2019, regarding appropriate actions on the part of participating countries for the second half of 2019.
“The JMMC expressed its appreciation for the excellent logistical arrangements for the meeting and thanked His Excellency, Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia and Chairman of the JMMC, for his gracious hospitality, as well as commending all officials and representatives from Saudi Arabia and the OPEC Secretariat who were involved in organizational matters.”
Speaking at the 14th Joint Ministerial Monitoring Committee (JMMC) Meeting in Saudi Arabia, H.E. Khalid A. Al-Falih Minister of Energy, Industry, and Petroleum Resources Jiddah, also said: “Balancing competing national priorities enter this endeavour (which is valid, may I add) and we have to produce solutions that ask a lot of us all. That we have chosen to do so – and have done so with considerable success – is something we should all be incredibly proud of, OPEC and our non-OPEC partners alike. Our shared goal of market stability, which clearly benefits everyone including consumers, has made the Declaration of Cooperation credible, responsive, and highly effective.
“We can’t allow our collective success to mask individual under-performance. Conformity should never be presumed and must be evenly distributed. My hope is that the vigorous participation of select countries, and its visible results, has shown the full potential of OPEC+ if everyone plays a full role. Cohesion and its practical demonstration are the true keys to success, be it conformity or more broadly acting in unison.”