OPEC+ Leaves Current Output Cut Policy Unchanged at JMMC

The OPEC+ joint ministerial monitoring committee meeting (JMMC) concluded on Wednesday, with the ministers refraining from making any changes to production policy, maintaining the plan to start raising output in December. 

“The JMMC emphasized the critical importance of achieving full conformity and compensation. Furthermore, the Committee will continuously assess market conditions,” OPEC said in a post-meeting statement, according to Charles Kennedy of OilPrice.com. Once again, ministers cautioned cartel members who continue to produce above quota. 

OIL MARKET: The OPEC+ Joint Ministerial Monitoring Committee puts the emphasis (again!) on cheating (compliance, on the cartel’s speak). Iraq, Kazakhstan and Russia claim they fully met their quotas in September (count my as skeptical). #OOTT pic.twitter.com/ZeqwkVEreZ

— Javier Blas (@JavierBlas) October 2, 2024

The WSJ reported on Wednesday that Saudi Energy Minister Prince Abdulaziz bin Salman allegedly warned OPEC+ ministers that if some members insisted on continually violating their quota agreements, oil prices could drop to $50 per barrel. Iraq and Kazakhstan are the most often cited violators of the output-cut agreement. While both countries have reported that they were in compliance in September, the official numbers will not be available to verify until next week, according to Reuters. 

This is part of the escalating Saudi threat to raise its price target and regain market share it has given up by bearing the heaviest burden of oil output cuts. The Kingdom has been going above and beyond to restrict supply to the market for more than a year. Apart from its share of the OPEC+ cuts in force since last summer, Saudi Arabia is also voluntarily keeping another 1 million barrels per day (bpd) off the market. It has been strictly sticking to its plan to produce “around 9 million bpd”—it has been consistently in line with its targeted oil output over the past year.

However, shortly after the report, OPEC itself took the unprecedented step of refuting the WSJ article, claiming that “the article falsely reported that a conference call took place in which the Saudi Arabian Energy Minister allegedly warned OPEC+ members of a potential price drop to $50 per barrel should they fail to comply with agreed production cuts. It also attributed an alleged quote to the Minister, stating: “Some better shut up and respect their commitments toward OPEC+.” These claims are entirely unfounded.”

OPEC secretariat stresses that no such conference call occurred last week, nor has any call or video conference taken place since the last OPEC+ meeting on September 5. The alleged statements, attributed to unnamed sources, lack any credibility and are completely fabricated.

With reference to the Wall Street Journal (WSJ) article, dated 2 October 2024, titled “Saudi Oil Min Said Prices May Fall to $50/B if Others Cheat, Sources Say,” the OPEC Secretariat categorically refutes the claims made within the story as wholly inaccurate and misleading.

The…

— OPEC (@OPECSecretariat) October 2, 2024

The denial prompted some to speculate if the Biden admin was pretending to OPEC members and leaking fake news to Reuters, WSJ and FT.

So the Biden admin is now pretending to be “OPEC sources” and rotating Reuters, FT and WSJ to leak fake news that hammer oil.

— zerohedge (@zerohedge) October 2, 2024

Total OPEC+ output cuts currently represent 5.86 million bpd. 

In December, OPEC+ is planning to increase output by 180,000 bpd and it unwinds cuts