OPEC reaffirms commitment to market stability, convenes first ministerial meeting of 2024

OPEC member countries and non-OPEC producing countries will continue cooperation and dialogue as part of their “unwavering efforts” to maintain oil market stability, and convene early next month for the first monitoring meeting of the year to review implementation of its latest oil output cut, the oil-producing group said.

The statement by OPEC follows the announcement by Angola last month that it would quit the group, as well as crude posting its first annual decline since 2020 last year.

“At the outset of 2024, the OPEC Secretariat in consultation with OPEC Member Countries and the non-OPEC producing countries participating in the Declaration of Cooperation (DoC), re-affirms the full commitment by the countries participating in the DoC to unity and cohesion, as well as their continued and unwavering efforts to maintain oil market stability going forward through the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings,” OPEC said in a statement.

“Moreover, OPEC Member Countries re-affirm their steadfast commitment to the shared objectives of unity and cohesion both within the Organization, and with the non-OPEC producing countries participating in the DoC,” the group said.

Voluntary cuts to support markets

The wider OPEC+ grouping, which includes Russia, announced last year it will be pursuing a further round of voluntary output cuts of about 2.2 million barrels per day (bpd) at least for the first three months of 2024, to support and stabilise the market. These cuts are in addition to the ongoing output reductions announced by OPEC.

The group is also planning to hold a virtual meeting of its Joint Ministerial Monitoring Committee (JMMC) on February 1, Reuters reported on Wednesday. The JMMC brings together leading OPEC+ members and generally meets every two months.

“The extraordinary efforts by OPEC Member Countries and non-OPEC producing countries participating in the DoC have been evident in supporting the global economy to overcome the many challenges witnessed throughout the past several years, including the COVID 19 pandemic, and have ensured stability of the oil market especially when compared to other commodities,” OPEC said.

“The unprecedented levels of cooperation, dialogue, mutual respect and trust will continue to be the basis for these continued collaborative efforts going forward. This is for the benefit of all producers, consumers and investors, as well as the global economy at large,” it said.

The scheduled JMMC meeting comes at a time when rising crude production from non-OPEC+ nations – including US shale production – is on the upswing. Contrary to market expectations, both Brent and West Texas Intermediate fell by more than 10% last year.

In addition, data compiled by Bloomberg last year showed that net-long positions held by non-commercial players across the major oil contracts on average stood at the lowest in records dating back to 2011.

OPEC Secretary General's warning on investments 

In an exclusive interview with Energy Connects in October, His Excellency Haitham Al Ghais, OPEC Secretary General, had cautioned about the dangers of underinvestment in hydrocarbons that could trigger oil market volatility.

“Both producers and consumers have a shared interest in sustaining oil market stability and ensuring long-term investments. For the oil industry alone, cumulative investments in the World Oil Outlook 2022 are projected at around $12 trillion in the period to 2045. Recent annual levels, however, have been significantly below the annual requirements. Underinvestment imperils the entire energy system, and in turn, the products and resources we can often take for granted on a daily basis,” he said.