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5

OPEC bulletin 12/17–1/18

C o n f e r e n c e N o t e s

W

ith the first snow flurries of the season

covering the streets of Vienna, the OPEC

Conference held its 173

rd

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.