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OPEC, non-OPEC optimistic of improvement in oil demand

The 17th OPEC and non-OPEC Ministerial Meeting (ONOMM), held via videoconference, on Tuesday, June 1, 2021 has noted that the…

The 17th OPEC and non-OPEC Ministerial Meeting (ONOMM), held via videoconference, on Tuesday, June 1, 2021 has noted that the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling as the economic recovery continued in most parts of the world as vaccination programmes accelerated.A statement issued after the meeting by OPEC on Tuesday in Vienna said that the Meeting welcomed the positive performance of Participating Countries in the Declaration of Cooperation (DoC) and stated that overall conformity to the production adjustments was 114% in April (including Mexico), reinforcing the trend of high conformity by participating countries.

According to the statement, in view of current oil market fundamentals and the consensus on its outlook, the meeting reaffirmed the existing commitment of the participating countries in the DoC to a stable market in the mutual interest of producing nations; the efficient, economic and secure supply to consumers; and a fair return on invested capital.

The meeting also reconfirmed the existing commitment of the 10th OPEC and non-OPEC Ministerial Meeting in April 2020, amended in June, September, and December 2020, as well as in January and April 2021 to gradually return 2 million barrels a day (mb/d) of the adjustments to the market, with the pace being determined according to market conditions.

It reiterated the critical importance of adhering to full conformity, and taking advantage of the extension of the compensation period until the end of September 2021, as requested by some underperforming countries.

“Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting,” the statement said.

It reconfirmed the decision made at the 15th OPEC and non-OPEC Ministerial Meeting with regards to production adjustments for the month of July 2021, given the observed market fundamentals.

It emphasized the need to continue to consult and closely monitor market fundamentals and maintain the monthly OPEC and non-OPEC Ministerial Meetings until the end of the decision made at the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020.

According to the statement, the 18th OPEC and non-OPEC Ministerial Meeting is scheduled for July 1, 2021.

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