The Organization of Petroleum Exporting Countries is seeking firmer ties with non-Opec suppliers regarding the management of oil output as the global market continues to see prices crashing that, in the Philippines, has sent pump prices down for eight straight weeks so far.
Opening the two-day 175th meeting of the Opec Conference —the group’s highest body— that kicked off Dec. 6, its president Suhail Mohamed Al Mazrouei said there had been “excellent collaboration” between Opec and non-Opec participants in the Declaration of Cooperation that they adopted in December 2016. This was based on an Opec statement posted on its website.
The unprecedented agreement forged among Opec and the 11 non-Opec producers, was for a concerted effort to stabilize the global oil market through voluntary production cuts of about 1.8 million barrels per day.
Initially effective for six months, the pact was extended twice to cover the whole of 2018, although the parties involved changed tack last June—which helped pave the way for the sudden drop in prices seen over the past two months.
Mazrouei, who is also the United Arab Emirates’ minister of energy and industry, said the agreement had been a success and shown “positive progress on removing the inventory overhang.”
But he said oil producers needed to focus joint efforts on maintaining the balance in global supply and demand that he said was achieved earlier this year.
“This will require us to change the strategy we took in June 2018,” Mazrouei said.
“It is essential that we look to move ahead with a more permanent relationship with our non-Opec producers, in order to continuously adapt to ongoing market dynamics, and to help meet the challenges, as well as opportunities, that we will face in the months and years ahead,” he said.
Preliminary reports show that in Thursday’s meeting, the joint committee of Opec and non-Opec ministers have recommended another round of production cuts.
However, as of this writing, Opec has yet to issue a statement regarding their next step.
Data show that the price of Dubai crude, the benchmark for shipments bound for Asian markets, dipped to $60.46 per barrel on Dec. 5 after hovering between $65 and $66 a barrel in the previous eight trading days.
In the Philippines, a downward run has seen pump prices fall down by a total of P10.55 per liter of diesel and P11.85 per liter of gasoline.