In Abu Dhabi will be a meeting of the Ministerial monitoring Committee of OPEC+

© RIA Novosti / Vitaly to Belowaverage in fotobanka Abu Dhabi. Archival photoIn Abu Dhabi will be a meeting of the Ministerial monitoring Committee of OPEC+© RIA Novosti / Vitaly to Belowaverage the image Bank

Ministerial monitoring Committee of OPEC+ (JMMC) on Sunday will meet in Abu Dhabi next meeting that the oil market is waiting for with special interest. First, it will take place a week later after the announcement of U.S. sanctions against Iran, and secondly, in the media appeared information that the Alliance will be discussed at the meeting, the reversal of the Vienna agreement on production cuts in 2019.

On the eve of November 10, there will be a meeting of the technical Committee of experts of the OPEC+. It is noteworthy that in October he was instructed to study the forecast of the oil market in 2019 and submit JMMC versions of the production levels of the countries of the Alliance, to avoid imbalance in the market.

OPEC and several non-organisation countries (OPEC+) agreed in late 2016 in Vienna on the reduction of oil production to 1.8 million barrels per day from the level of October 2016, of which 300 thousand were in Russia. The contract started from the beginning of 2017 and has been extended until the end of 2018. In June 2018 OPEC+ agreed goal is to escape from the fulfillment of the terms of the agreement, which then accounted for 47%.

To monitor compliance with the agreement and develop recommendations on its improvement was created by JMMC, which includes the representatives of Venezuela, Kuwait, Algeria, Oman, Russia, Saudi Arabia. Committee meetings are also attended by the OPEC Secretary General Mohammed Barkindo and UAE energy Minister Suhail al-mazroui on the rights of the President of OPEC.

The Iranian issue

OPEC’s decision to hold a meeting of the Ministerial Committee in November, when it will soon be another meeting of all 25 countries participating in the agreement in Vienna on 7 December, many market participants associated with the resumption of the 5 Nov of U.S. sanctions against Iran’s oil sector. As expected, they will significantly reduce oil exports from the Islamic Republic, and thus OPEC+ seriously need to review this issue.

The US Secretary of state Mike Pompeo on Monday said that Washington provides temporary exceptions to the Iranian sanctions to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.

However, OPEC+ and the official reason to hold a meeting of the Committee in November: back in the summer, the countries agreed to conduct monthly in person or via videoconference. In addition, immediately after the meeting JMMC in Abu Dhabi launched a major industry conference ADIPEC which will be attended by many of the Ministers Alliance.

From plus to minus

Oil prices reacted to news about special permissions USA on the purchase of Iranian oil decline. So, on Friday the price of Brent crude oil fell below $ 70 a barrel for the first time since April 10 and the price of WTI fell below $ 60 a barrel for the first time since March 8. Obviously, the participants have a new appreciation for the real volume, which can decrease the exports of Iran, namely that the loss can be much less.

After a few days after the Iranian news media reported that the Ministerial Committee of OPEC to meet in Abu Dhabi among different scenarios OPEC+ in 2019 will discuss the possibility of reducing oil production by the countries of the agreement. It was noted that some members of the Alliance are concerned about the growth of commercial oil reserves in the world lately.

As explained by RIA Novosti, the head of Saxo Bank strategies in the commodities market, OLE Hansen, reports of discussions in the JMMC reduce production in 2019 «coincide with the realization of the fact that U.S. sanctions may not lead to the same big drop (of Iranian oil exports — ed.) as expected, while oil production in the US continues to grow.»

And the associate Director of corporate ratings group ACRA Basil Tanurkov noted that high oil prices at the moment are actually supported mainly by the risk of reducing the supply because of the sanctions against Iran, as well as falling production in Venezuela. While oil production in the U.S. is growing at a record pace, since the beginning of the year it has added more than 1 million barrels per day. In addition, OPEC+ is also increasing production in July.

«Thus, if OPEC+ put aim hold oil prices above $ 70 per barrel of Brent crude, almost inevitably they will have to renew the agreement, if not reduce, at least – on the restriction of the production,» he said.

In turn, the delegate of Iran in OPEC Hossein Kazempour Ardebili told the Financial Times that Russia and Saudi Arabia have built up too much oil production, excessive responding to the Iranian rhetoric of the United States, so at least they must reduce their oil production is 1 million barrels per day.

However, about the possibility of reducing oil production by the OPEC countries+ in 2019 was announced by the Minister of energy of Saudi Arabia Khalid al-falih.

In September, he reported that OPEC+ expects excess supply in global oil market in 2019 and allows for the possibility of a return to production cuts. And on October 31 he said that OPEC+ hopes in December to sign an agreement on permanent cooperation, then the country will be able to establish new indicators of oil production by 2019.

In Abu Dhabi will be a meeting of the Ministerial monitoring Committee of OPEC+© Infographicsrussia forces in the world oil market