By Udeme Akpan
Heads of Delegation, Organisation of Petroleum Exporting Countries, OPEC, has recommended the extension of the proposed 1.5 million barrel per day, bpd, oil cut until the end of 2020, instead of June 30.
In a statement sent to Vanguard, the organisation said: “In view of market developments and following OPEC’s 178th extraordinary meeting, the Heads of Delegation of the OPEC Conference held further consultations and decided to recommend extending the duration of the proposed 1.5 million barrel per day additional adjustment until the end of 2020, instead of June 30, 2020.
“The consultations, monitoring and constant review undertaken of current market conditions demonstrate the strong commitment of OPEC member-countries to work together to restore oil market stability.
“Declaration of Cooperation members are determined to jointly rise to meet the current pressing challenge.”
Before then, the 178th (Extraordinary) Meeting of the Conference of the Organisation of the Petroleum Exporting Countries, OPEC, had ended in Vienna, Austria, with the recommendation of 1.5 million barrels per day, bpd, output cut until June 2020.
Earlier, OPEC had stated: “The 178th (Extraordinary) Meeting of the Conference of the Organisation of Petroleum Exporting Countries, OPEC, was held in Vienna, Austria, on Thursday, March 5, 2020, under the Chairmanship of its President, Mohamed Arkab, Minister of Energy of Algeria and Head of its Delegation.
“The conference took note of the announcement from Ecuador that it has withdrawn from its Membership of OPEC, with effect from January 1, 2020.
“The Conference recalled the First OPEC Summit held from March 4 to 6, 1975: exactly 45 years ago, in Algeria. The summit saw the establishment of OPEC’s sister organisation— OPEC Fund for International Development.
“The Conference acknowledged Dr. Abdulhamid Alkhalifa, Director-General of OFID, and his able staff, for their great achievements in contributing to reducing poverty and improving the lives of millions of people around the globe.
“The Conference reviewed the report and recommendations of the Joint Ministerial Monitoring Committee, JMMC, whose work continues to be ably supported by the Joint Technical Committee, JTC, and the OPEC Secretariat.
“The Conference took note of oil market developments since it last met in Vienna on December 6, 2019 and reviewed the oil market outlook for the remainder of 2020.
“It noted the positive ramifications of the decision to further voluntarily adjust production at the 177th Meeting of the Conference, and subsequently the 7th OPEC and non-OPEC Ministerial Meeting, with market sentiment improving in the weeks thereafter.
“However, the COVID-19 outbreak has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters. Global oil demand growth in 2020 is now forecast to be 0.48 mb/d, down from 1.1 mb/d in December 2019.
“Moreover, the unprecedented situation, and the ever-shifting market dynamics, means risks are skewed to the downside. The Conference noted that the further impact of the COVID-19 outbreak on oil market fundamentals necessitates further continuous monitoring.
“Accordingly, in view of the current fundamentals and the consensus on market perspectives, the Conference decided to recommend to the 8th OPEC and non-OPEC Ministerial Meeting to extend the adjustment levels agreed at the 177th Meeting of the Conference and the 7th OPEC and non-OPEC Ministerial Meeting for the remainder of the year.
“It also agreed to recommend to the 8th OPEC and non-OPEC Ministerial Meeting a further adjustment of 1.5 mb/d until 30 June 2020 to be applied pro-rata between OPEC (1.0 mb/d) and non-OPEC producing countries (0.5 mb/d) participating in the Declaration of Cooperation.
“Member-Countries reaffirmed their continued focus on fundamentals for a stable and balanced oil market, in the interests of producers, consumers, and the global economy.
“The Conference emphasised the ongoing dialogue with consuming countries, and the consultations undertaken in a collegial spirit before reaching decisions.
“Member-Countries are resolute and committed to being dependable and reliable suppliers of crude and products to global markets.
“The Conference confirmed that its next Ordinary Meeting will convene in Vienna, Austria, on June 9, 2020, and noted that September 2020 will mark the 60 year anniversary since the founding of organisation in Baghdad in 1960.”