The Joint Ministerial Monitoring Committee (JMMC) of OPEC+ decided to keep production policy intact at its recent virtual meeting, according to Commerzbank’s commodity analyst Carsten Fritsch. This decision was expected, as indicated by pre-meeting statements from informed sources. The planned gradual increase in oil production from the 4th quarter will remain in place for now.
Market conditions will ultimately determine whether this production increase will occur, as highlighted by representatives of Saudi Arabia and Russia. The 8% decline in oil prices since mid-July, driven by demand worries, may have made OPEC+ reconsider the feasibility of the planned supply boost if demand growth is weaker than anticipated.
While Iraq, Kazakhstan, and Russia have reaffirmed their commitment to adhering to agreed production cuts, there have been past instances of non-compliance. Iraq, in particular, has exceeded production limits in the past despite promises to the contrary.
Overall, the decision to maintain the current production policy has implications for oil prices and market stability. Monitoring future developments in OPEC+ decisions and member compliance will be crucial for investors and stakeholders in the energy sector.