The Strategist

OPEC + expects reduction in commercial oil reserves in the second half of 2019

09/02/2019 - 09:29

Members of the OPEC + oil production agreement expect a significant reduction in commercial stocks of oil and oil products in the world in the second half of 2019, caused by the still ongoing deal, the alliance’s ministerial monitoring committee wrote on the OPEC website.

Barta IV via flickr
Barta IV via flickr
"The Joint Ministerial Monitoring Committee (JMMC) emphasized the growing importance of the Declaration of Cooperation in maintaining the stability of the oil market, which, along with the still healthy level of demand, restrains the growth of oil commercial reserves in the world and should lead to a significant reduction in the second half of the year," the release reads.

The alliance also said that in July, OPEC + countries have fulfilled an agreement to reduce oil production by 159% against 137% a month earlier.

“The JMMC noted that the total compliance with the transaction in July 2019 was 159%, which is 22 percentage points higher than in June 2019, and the average execution since January 2019 was the highest and amounted to 134%. This high level of compliance the deal was offset by market uncertainty due to continued concern over economic growth," the report said.

The transaction of OPEC and a number of countries outside the organization (OPEC +) to reduce oil production has been in effect since the beginning of 2017. For the first half of 2019, it was agreed in the amount of 1.2 million barrels per day from the level of October 2018. In early July, OPEC + countries unanimously approved extension of the transaction on existing conditions for another nine months, until the end of March 2020.