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A monitoring committee of OPEC and its partners in the production cut deal could discuss this week adopting new metrics to monitor the state of the global oil market and its balance, Russian news agency TASS quoted OPEC’s Secretary General Mohammad Barkindo as saying on Monday.
“This is not on the agenda, but we can discuss it (metrics) as we will discuss the market situation,” Barkindo said, as carried by TASS.
The Joint Ministerial Monitoring Committee (JMMC) of the OPEC and non-OPEC countries that are part of the deal is meeting in Abu Dhabi later this week to take stock of the oil market and the OPEC+ coalition’s efforts to erase the glut and prop up prices.
At the end of last month, the JMMC said that the July 2019 overall conformity level of 159 percent was 22 percentage points higher than in June.
The JMMC meeting this week comes as oil prices continue to be lower than what many OPEC members need to balance their budgets and as various surveys pointed that the cartel raised its crude oil production in August compared to July, and lifted exports to a four-month high.
The meeting also comes at a time when the markets are jittery about a global economic slowdown and a consequent slowdown in oil demand growth.
Reports have recently emerged that OPEC is now considering using several metrics to assess where global oil (over)supply stands, including taking the five-year average of oil stocks in 2010-2014 instead of the most recent five-year average 2014-2018, which it currently reports in its monthly oil market reports and which the International Energy Agency (IEA) also takes as a benchmark to measure oil inventories.
Analysts warn that the 2010-2014 average metric will not give a correct comprehensive assessment of the oil market.
Fatih Birol, the IEA’s executive director, warns that moving the goalposts doesn’t change the situation in the oil market. The glut is there, regardless of how OPEC wants to measure inventories, Birol told Reuters in July.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.