Ministers insist on respecting the cuts
Meeting of Opep + ministers
OPEC + ministers maintained their agreement to cut oil production at a monthly meeting on Wednesday, recalling the importance of strict compliance with these commitments to rebalance the black gold market hit by the Covid- 19, according to AFP reports.
For the Russian Minister of Energy Alexandre Novak, the obligations to reduce production within the framework of OPEC +, which brings together the thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) and ten allied producer countries, have were 95% met in July. This figure rises to 97% including Mexico, said a cartel statement issued shortly after the meeting, a “significant performance in terms of compliance for the entire group.” Noting that the overall compliance rate with the agreement was “satisfactory”, the Algerian Minister of Energy Abdelmadjid Attar, quoted by the APS agency, stressed that this rate would have been even higher if all countries had fully achieved the agreed production cuts. Two bad students, Nigeria and Iraq, are in particular in the crosshairs. “We cannot stop there, we must ensure absolute respect for the Opep + agreement”, asked Mr. Novak in an introductory speech. Ahead of the discussions, the Saudi Minister of Energy Abdel Aziz ben Salman had for his part insisted on the compensation requested from the latecomers, which he hopes will be achieved “by the end of September”. This virtual meeting also made it possible to ratify, at least until the next one scheduled for September 17, the march of production cuts that the signatories of OPEC + have imposed themselves since May in response to the drop in demand caused by the pandemic. Producers had decided in April to reduce their production by 9.7 million barrels per day in May and June. A reduction in this drastic cut was made a few months later: since August 1, members of Opec + are supposed to reduce their production to 7.7 mbd initially (not counting any catch-ups by latecomers) then to 5.8 mbd from January 2021 to April 2022, “and perhaps beyond”, the Saudi minister opened. The group of producers has also “observed some signs of gradual improvement in market conditions, including the reduction in stocks and the gap between world oil supply and demand,” the statement said. “Nevertheless, the pace of the recovery seems to be slower than expected, with a growing risk” of a second wave of Covid-19, he notes. At the close on Wednesday, the barrels of Brent and WTI were moving around 45 dollars and 43 dollars, far from the lows of the end of April which had contributed to the implementation of drastic cuts by OPEC +.
Djamila Sai
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