Adedapo Adesanya
By Adedapo Adesanya
The Joint Ministerial Monitoring Committee (JMMC) of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) will meet in early February, amid worries about the future of the group following recent developments including another exit.
OPEC+ typically holds JMMC meetings every other month, but when faced with volatile market conditions and member unrest, these have sometimes prompted the group to schedule meetings outside the usual schedule.
OPEC+ members collectively decided to voluntarily cut 2.2 million barrels per day from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million barrels per day voluntary cut.
At the November meeting, many OPEC+ members voluntarily agreed to cut their crude oil production, but Africa’s largest producer after Nigeria, Angola was not happy about what it was asked to produce, which was well below its 1.3 million barrels per day target.
Angola decided to follow the likes of Indonesia, Qatar, and Ecuador out the door, agreeing to forgo its membership in OPEC, citing the lack of benefits after its production quota was lowered to align with actual production.
The OPEC+ production cuts that are currently in effect are only scheduled to last through the end of the current quarter—and it’s highly unlikely that the production cuts are going to be in full effect on January 1, after only being agreed to on November 30.
This means that the JMMC will only have a partial month—at best—of production data to review if the meeting is held sometime in early February.
Market analysts note that OPEC will have a few months’ worth of crude oil demand data that the group could use to determine whether the voluntary production cuts should be in place beyond the first quarter—or even end early.
The group’s goal to balance the market is also being threatened by US shale production, which hit an all-time high last year.
