OPEC+ committee emphasizes importance of adhering to agreed production levels - Commerzbank

The Joint Ministerial Monitoring Committee (JMMC) of OPEC+ held its regular bimonthly meeting virtually yesterday, Commerzbank's commodity analyst Carsten Fritsch notes.

Market participants expect production volumes to be increased

"The only noteworthy point in the press release is that great importance is attached to compliance with the OPEC+ production agreement and that countries that previously produced above the agreed levels should submit plans for compensatory cuts by August 18. However, there was no production recommendation for OPEC+."

"Since the production decision lies with the eight OPEC+ countries with voluntary production cuts, the JMMC has lost importance. This could change again at the next JMMC meeting on October 1, as the production increases by the eight countries are expected to be completed by then. The next decision by these countries is due this coming weekend."

"Market participants and analysts surveyed by Bloomberg unanimously expect production volumes to be increased again by almost 550,000 barrels per day in September. This would mean that the voluntary production cuts would be completely reversed a year earlier than originally planned."