OPEC bulletin 12/17–1/18
C o n f e r e n c e N o t e s
ith the first snow flurries of the season
covering the streets of Vienna, the OPEC
Conference held its 173
Meeting at the
OPEC Secretariat. The semi-annual gathering was an
opportunity to analyze oil market developments since the
Conference last met at the end of May 2017, as well take
stock of developments through the prism of the historic
‘Declaration of Cooperation’ between 24 participating
OPEC and non-OPEC producers.
In his opening address, the President of the OPEC
Conference, Khalid A Al-Falih, Saudi Arabia’s Minister
of Energy, Industry and Mineral Resources, noted that
when the Conference last met in May, it was apparent
that more work needed to be done, which then resulted
in the ‘Declaration of Cooperation’ being extended for a
further nine months.
In looking back over the past six months, he stated
that “the market trajectory seen since then has shown
that the extension decision (in May) was right.” To under-
score his comment, he pointed to hard data.
He highlighted the large fall in the OECD stock
overhang in terms of the moving five-year average; the
hefty drop in crude in floating storage; the fact that the
drawdown has applied broadly to all regions, as well as
to both crude and products; and the market structure
flipping into backwardation for both Brent and WTI, for
the first time since 2014. The Conference President noted
that “all in all, market stability has improved and the sen-
timent is generally upbeat.”
He said that “this gratifying outcome has resulted pri-
marily from a near 100 per cent — or more — conformity
to the production targets by the combined OPEC 12” and
added that OPEC’s credibility has also been enhanced.
The Conference President said that when look-
ing at the mid- to long-term, the future market envi-
ronment looks encouraging, underpinned by a broad-
based global economic recovery that is gathering pace.
Correspondingly, he said, “we continue to see further
signs of strong oil demand.”
While recognizing the very major achievements that
have been made to date, he also stressed that it was
important “to acknowledge that we have only recently
Khalid A Al-Falih (c), Saudi Arabia’s Minister of Energy, Industry and Mineral Resources, and President of the OPEC Conference; Estévâo Pedro (l),
Chairman of the OPEC Board of Governors and Angola’s Governor for OPEC; and Mohammad Sanusi Barkindo (r), OPEC Secretary General.