OPEC bulletin 11/17
The Russian Federation, as the largest single non-
OPEC producing country, agreed to be the co-chair of the
I must say that with my distinguished colleague,
Minister of Energy Alexander Novak, we have together
co-chaired the JMMC as a team through some critically
challenging moments. Equally, it has been a pleasure to
work with the other distinguished member countries of
the JMMCwho are Oman, Algeria andVenezuela. And with
the able input, support, and wise vision and leadership
of Khalid A Al Falih, the Minister of Energy, Industry and
Mineral resources of the Kingdom of Saudi Arabia, our
work in the JMMC has been evermore successful.
The JMMC as a team with its highly committed mem-
bers has been successful in bringing the market back to a
rebalancing path in a systematic way. Overall conformity
levels have improved significantly and we achieved con-
formity level of 120 per cent for the month of September,
a historic high. This is truly a rate that is very impressive
and which has gained respect and credibility in the mar-
ket. Also, the overhang in OECD stocks above the five-
year average has declined by 178 million barrels since
the beginning of this year. Many other market indicators
have recently become more bullish and have helped the
recovery of oil prices to be in the level of around $58/b.
The world economy is showing smooth recovery and
demand is growing more than previously anticipated.
Hence, the market is rebalancing and we are quite con-
fident it will occur soon in accordance with the road map
strategy set by the ‘Declaration of Cooperation’ signed by
the 24 producing nations.
How important have the Joint Technical Committee and
the OPEC Secretariat been to the work of the JMMC?
The Joint Technical Committee (JTC) has been the corner-
stone supporting the successful mission and achieve-
ments of the JMMC and, hence, the Declaration. The
work of the OPEC Secretariat together with the JTC as one
team is unprecedented and the combination of technical
experts from the Member Countries of the JMMC, along
with the Secretariat, has been a very effective tool to sup-
port the decision-making process at the JMMC level. I take
this opportunity once again to express my deep appreci-
ation to the members of the JTC and the OPECSecretariat
for their effortless and continued work.
While the short-term oil outlook challenges are evidently
in everyone sights, how important is the ‘Declaration
of Cooperation’ to medium- and long-term oil market
The ‘Declaration of Cooperation’ is vital and essential for
the assurance of the health of the market for medium-, as
well as long-termprospects. It will ensure stability so that
prices recover to levels that are sustainable for market
prosperity. We are successfully and gradually transform-
ing the market from being characterized by surplus, com-
petition, volatility and weak prices into a more balanced
market that helps stimulate economic growth and, more
importantly, investment into the industry. Hence, it is key
for future growth. More important is the birth of this group
of 24 producers that will remain closely and effectively
working together for stable and secure markets. It is now
our objective to transform this exemplary cooperation
between OPEC and non-OPEC producing countries into
a more institutionalized form of long-term cooperation.
Without the ‘Declaration of Cooperation’ of 24 producing
nations, what might the oil market and the global econ-
omy look like today?
The market situation in 2015 and 2016 is still vivid in our
memories. It was characterized by extreme uncertainty
and competition leading to volatility and a significant
reduction inmuch needed investments in the oil industry.
Oil prices were lower than $30/b for significant period of
time. The impact was great on our governments and econ-
omies. Hence, the ‘Declaration of Cooperation’ clearly
is helping to create a more stable market environment
which we are beginning to bear the fruits of, reflected not
only in higher oil prices, but also in a clearly more confi-
dent and positive sentiment amongst key market players.
How do you view oil market prospects for 2018?
As I have repeatedly stated from the beginning of this
year, market re-balancing will happen and it is just a
matter of time, which require patience and diligent
action by the countries participating in this ‘Declaration
of Cooperation’. I can now confidently say that we are
now well underway and on course to reach a rebalanced
oil market, although we still have some more work to
do. Supported by a healthier outlook for oil demand
next year fuelled by a bullish economic growth forecast,
and with continued discipline amongst oil producing
nations, I am confident that we will see more balanced
market in 2018.