Adedapo Adesanya
By Adedapo Adesanya
The Organization of the Petroleum Exporting Countries (OPEC) daily basket price stood at $43.80 per barrel on Thursday, according to the latest OPEC Secretariat calculations released on Friday.
The contraction showed a 0.73 per cent drop compared with $44.12 per barrel on Wednesday.
This happened as tapered cuts announced by the cartel and its allies proved combined with demand worry brought about by fear of a second wave of global lockdowns, held back rallying.
Also known as the OPEC reference basket of crude oil, the OPEC basket, a weighted average of oil prices from different OPEC members around the world, is used as an important benchmark for crude oil prices.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
In other OPEC related news, the Joint Ministerial Monitoring Committee (JMMC) of OPEC+ on Thursday, disclosed that conformity to the production cut deal by participating OPEC and non-OPEC Countries at 107 per cent in June 2020, an achievement that found wide recognition in the market.
It reiterated its appreciation of additional voluntary contributions made by Saudi Arabia, the United Arab Emirates and Kuwait in the month of June 2020.
The committee noted that removing the credit for over-conformity results in a conformity level of 95 per cent from OPEC members alone, the highest since the inception in January 2017.
It requested the Joint Technical Committee (JTC) and the OPEC Secretariat to closely monitor and report to the JMMC the implementation of the required compensation by the underperforming participating countries.
It also requested underperforming participating countries to submit their plan for implementation of the required compensation for the month June 2020 to the OPEC Secretariat by the end of July 2020.
The committee welcomed the participation of Angola, Gabon, South Sudan and Congo, and noted that they had reiterated their commitment to the production adjustments and compensation plans.
It observed that there were encouraging signs of improvement as economies around the world open up. While there could be localized or partial lockdowns re-imposed in some places, the recovery signs are clear, both in physical and futures markets.
It noted that moving to the next phase of the agreement, the extra supply resulting from the scheduled easing of the production adjustment will be consumed as demand recovers.
The next meetings of the JTC and the JMMC are scheduled for August 17 and 18, 2020.
