Baku, Azerbaijan, Nov.20
By Leman Zeynalova – Trend:
OPEC is expected to detail production cuts among its members in its upcoming December meeting, Joseph Gatdula Head of Oil & Gas Analysis, Fitch Solutions Macro Research (a unit of Fitch Group) told Trend.
“In 2019, we see multiple events play out starting with the effects of the upcoming OPEC meeting on December 6. We expect OPEC to announce is strategy to manage the oil market, which we expect will detail production cuts among its members,” said the analyst.
He pointed out that the size of the cut will help balance oil supplies into 2019 although the expiration of waivers for Iranian crude in March will again test the markets.
“Waiver extensions or reductions for Iran exports may tip the market out of equilibrium causing more volatility. The US/China trade war is also expected to heavily weigh on demand in 2019 as the impact to trade will begin to slow all economies as uncertainty will further affect capital investments lowering GDP, a key indicator of oil demand,” added Gatdula.
The Declaration of Cooperation constitutes an unprecedented milestone in the history of the Organization of the Petroleum Exporting Countries (OPEC). For the first time ever, the Member Countries of OPEC coordinated with 11 non-OPEC oil producing countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary production adjustments, which amounted to approximately 1.8 million barrels per day.
The Declaration was an outcome of the Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 and was effective for an initial period of six months. The Second Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017. At the third joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 30 November 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.
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