Global Oil Demand Must Decrease By 9mbpd, OPEC+ Insists
The Organisation of Petroleum Exporting Countries (OPEC) and its allies, OPEC+, has said it expects global oil demand to contract by around nine million barrels per day (b/d) for the whole of 2020.
At a ministerial meeting of members held via videoconference at the weekend, participants reaffirmed their country’s continued commitment to crude production cut as agreed in the ‘Declaration of Cooperation’ (DoC), a strategy approved at OPEC’s extraordinary meeting held on April 12, 2020.
This is even as Nigeria’s minister of State for Petroleum Resources, Chief Timipre Sylva, has expressed the country’s willingness to continue collaborating with OPEC and OPEC+ in their efforts to adjust crude oil production towards rebalancing and stabilising the global crude oil market for the benefit of all.
The minister, in a statement signed by senior assistant on media, Garba Deen Mohammad, yesterday, said the country is in full alignment with the decision to closely monitor the market dynamics.
He noted that Nigeria is convinced that the current gradual recovery being witnessed will be sustained to full traction.
The statement reads in part: ”Nigeria reaffirms its commitment,
alongside its OPEC+ counterparts to extend the first phase of the production adjustments of 9.7 mb/d by one month until the end of July 2020.
”Nigeria also subscribes to the concept of compensation by countries that are unable to attain full conformity (100 per cent) in May and June 2020 to compensate for it in July, August and September 2020.”
The Wall Street Journal (WSJ), had last week reported that news of a tentative pact to extend production cuts comes after Iraq and Nigeria committed to improve their adherence to any future agreements.
The business magazine stated that ”Iraq cut only half of its agreed one million barrels a day in May and Nigeria cut 52 per cent of the amount promised as a part of the April pact, the paper reported.”
An statement issued earlier at the end of the OPEC, OPEC+ ministerial meeting noted that the ‘Declaration of Cooperation’ (DoC) was designed to ensure a stable and efficient market, mutual interest of oil producing nations, as well as economic and secure supply to consumers, and a fair return on invested capital.
The meeting emphasised the importance of DoC participants and their full commitment to efforts aimed at balancing and stabilising the market.
It however stated that, ”it was noted that global oil demand
was still expected to contract by around nine mb/d for the whole of2020.”
According to the statement, the agreement reached at the meeting includes that participant countries: Reconfirmed the existing arrangements under the April agreement; subscribed to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, with a willingness to accommodate it in July, August and September, in addition to their already agreed production adjustment for such months; agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month; recognised that the continuity of the current agreement is contingent on them fulfilling elements 1 and 2 above; agreed without dissent that the full and timely implementation of the agreement remains inviolable, based on the five key elements, and endorsed the ‘Statement on the Declaration of Cooperation.’
The meeting also called upon all major oil producers to proportionally contribute to the stabilisation of the oil market, taking into consideration the substantial effort made by the OPEC and non-OPEC participating countries of the DoC.
SOURCE: oglinks.news
