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27

OPEC bulletin 11/17

The Russian Federation, as the largest single non-

OPEC producing country, agreed to be the co-chair of the

committee.

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

prospects?

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.