OPEC – JMMC Meeting: Wednesday 3rd March 2021

OPEC – JMMC Meeting: Wednesday 3rd March 2021

The OPEC+ Joint Ministerial Monitoring Committee (JMMC) will convene on Wednesday and will be followed by the oil producing alliance’s Ministerial Meeting on Thursday, where the future volume of oil production cuts would be determined. 

The JMMC on Wednesday will oversee the compliance of the OPEC+ participants with the oil production quotas. According to the International Energy Agency (IEA) the compliance reached 103 percent in January, its highest level since June. The committee will also revise how the underperforming countries are offsetting their production shortcomings from the previous months. 

At the OPEC Ministerial Meeting, the volume of oil production cuts in April and in the following months would be on the agenda. The OPEC+ countries were required to cumulatively slash production by 7.2 million barrels a day (mbd) in January, while in February the quota eased to 7.125 mbd and in March to 7.05 mbd, mainly due to slight increase in oil production granted only to Russia and Kazakhstan. 

Beyond the required OPEC+ quotas, Saudi Arabia has been contributing a voluntary oil production cut of 1 mbd in February and March and some other OPEC+ members have been additionally slashing 425,000 barrels daily over the same period. 

What does this mean for Crude Oil? 

With easing concerns over COVID-19 cases and economic activities picking pace, crude oil prices have been rising of late, barring occasional profit-taking. 

OPEC quoted Secretary General Mohammed Barkindo in a series of positive tweets, noting that “the headwinds of uncertainty that shocked the market last year continue to abate.” 

“The outlook for the global oil market continues to be positive. Positive global economic developments and resilient demand in Asia are encouraging”. 

Brent crude is trading above the $63/bbl mark amid expectations that OPEC and its allies may boost oil supply. 

Crude oil prices may rise in the near-term so watch the markets carefully for an opportunity to trade. 

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