During the 5th meeting of the Joint Ministerial Monitoring Committee (JMMC), hled in Vienna on 22 September 2017, Issam A. Almarzooq, minister of oil and minister of electricity and water in Kuwait and chairman of the JMMC, has said that the oil market situation has improved since the last meeting in St. Petersburg in July 2017
“The destocking process has accelerated in recent months. The most recent data for August 2017 now shows OECD commercial oil inventories around 170 mmbbl above the five-year average. This compares to the beginning of 2017, when the level was 340 mmbbl above the five-year average. Moreover, floating storage has declined significantly in recent months,” he stated.
According to him, the catastrophic hurricanes that have hit the US Gulf Coast in recent weeks and the subsequent refinery outages have evidently had some short-term repercussions with risings US stock levels.
“However, the US energy industry already appears to be rebounding quickly,” he said.
“We have also witnessed a distinct change in the market structure over the past couple of months, initially with a narrowing contango and more recently when Brent flipped into backwardation. This we believe is a sign of the shrinking stockpiles, as well as stronger demand.”
He further added that the countries should place the continuing and unprecedented high conformity levels achieved by the participating OPEC and non-OPEC countries to the ‘Declaration of Cooperation.’
This means, according to him, reviewing recent oil market developments, assessing conformity levels, both collectively and individually, and looking at ways and means to continually improve these levels and the market rebalancing process in the months ahead.
“We should remember that our actions are being watched closely. We need to remain steadfast and resolute in seeing through this market rebalancing process, in the interests of both producers and consumers, and the global economy as a whole. It is vital in helping to ensure a stable and secure energy future,” he concluded.
