Page 7 - MEOG Week 25

MEOG Commentary MEOG

house Trafigura Group, said in an interview added credibility to the OPEC+ supply deal and
prior to meeting. “Performance is going to be could bring even more oil off the market just as
better. The message at the last meeting was taken the demand recovery from the coronavirus pan-
very seriously, and none would like to go to the demic begins to accelerate.
next OPEC+ meeting and be labelled a cheater.” International oil prices have stabilized near
A post-meeting news conference was $40 a barrel, double the level in April.
abruptly cancelled and rescheduled for during The recovery began after OPEC+ agreed to
the week of June 22, after all underperforming end a price war and make its biggest ever output
members submit their compensation schedule cuts. The rebound has been further assisted by
for production cuts. a rapid recovery in demand as Europe and the
The next JMMC meeting is set for July 15, U.S. join the initial China-led comeback from
with a delegate-level technical meeting held the lockdown.
day before. The monitoring committee did not Still, oil markets remain vulnerable, with a
discuss extending or deepening the cuts beyond huge surplus in fuel stockpiles and the threat of
the current plan. a second wave of the virus weighing on prices.
Under the current agreement, OPEC+ will In Thursday’s meeting, the OPEC+ JMMC
taper its production cut to 7.7 mn bpd from agreed that global oil inventories may decline to
August to December, then shrink the curbs fur- a five-year average level later this year or in mid-
ther to 5.7 million barrels a day until April 2022 2021, provided member countries meet their
The accord, reached in principle earlier in obligations, Russian Energy Minister Alexan-
June, was finalized at a ministerial video confer- der Novak said in interview with Rossiya 24 TV
ence on Thursday, according to delegates. It gives channel.™

Week 25 24•June•2020 www. NEWSBASE .com P7