OPEC+ leaves the current production cut policy unchanged at JMMC

The OPEC+ meeting of the joint ministerial monitoring committee (JMMC) ended on Wednesday, with ministers refraining from changing production policy, maintaining the plan to start increasing production in December.

“JMMC emphasized the critical importance of achieving full compliance and compensation. In addition, the Committee will continuously assess market conditions,” OPEC said in a statement after the meeting.

Once again, ministers have warned cartel members who continue to overproduce.

Earlier on Wednesday, Saudi Energy Minister Prince Abdulaziz bin Salman warned OPEC+ ministers that if some members persisted in continuing to violate their quota agreements, oil prices it could drop to $50 on the barrel. Iraq and Kazakhstan are the most frequently cited violations of the production cut agreement. While both countries reported being in compliance in September, official numbers won’t be available for verification until next week, according to Reuters.

It is part of Saudi Arabia’s growing threat to raise its price target and regain the market share it has lost by bearing the brunt of oil production cuts. The kingdom has been limiting market supply for more than a year. In addition to its share of OPEC+ cuts in place since last summer, Saudi Arabia is also voluntarily keeping an additional 1 million barrels per day (bpd) off the market. It has stuck closely to its plan to produce “about 9 million bpd” – it has been consistently in line with its target oil production over the past year.

Total OPEC+ production cuts currently stand at 5.86 million bpd.

In December, OPEC+ plans to increase output by 180,000 bpd and reverse cuts.

By Charles Kennedy for Oilprice.com

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