JP Morgan: Opec Deal Compliance To Be 75% In January
The compliance of the OPEC oil output deal could reach 75 percent in January, according to the Oil Market Weekly report of the US JP Morgan bank.
The official assessment will be published by OPEC on Feb.13, based on its assessment of production, plus a summary of the official government statements of their respective output levels.
However, JP Morgan attaches a low level of confidence to its assessment.
“Oil markets remain tightly bound in the price range that has existed since early December. Although consensus expectations seem to have coalesced around OPEC having made a strong start to its pledge to reduce production, and that output is close to 32.3 million barrels per day, risks remain that some of the members have not yet implemented the agreement as quickly as others,” said the report.
Specifically, there is still the potential for Iranian output to continue to increase, given recent comments from Iranian Oil Minister Zanganeh, that the country still targets 4 million barrels per day later this year, according to JP Morgan.
During a meeting in Vienna, Austria, on Nov. 30, 2016, OPEC members decided to implement a new production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the output by 558,000 barrels per day during the meeting held Dec. 10, 2016.
Eleven non-OPEC countries – Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan – agreed to reduce the oil output.
OPEC and non-OPEC countries pledged to start implementing the deal from Jan. 1, 2017 for six months, extendable for another six months.