Oil Continues to Fall on OPEC+ Comments

The Organization of Petroleum Exporting Countries (OPEC) and Joint Ministerial Monitoring Committee (JMMC) meeting is taking place today. They have made quite a few comments and Crude Oil is still slipping lower, following yesterday’s bearish reversal. Here are the main comments:

IEA:

• OPEC+ faces daunting challenges in managing the market in 2020
• Demand for OPEC+ crude will be 1.4 million bpd below August production in H1 2020
• Says halt in stockpiles is seen to be temporary
• There could be a significant increase in stockpiles in 2020
• OPEC+ producers will see surging non-OPEC oil production next year

OPEC+:

• Discussing improving output cut compliance
• Important for all countries to reach full conformity with output cuts
• Compliance reached 136% in August
• Non-compliant countries have pledged to achieve 100% compliance
• Next JMMC meeting will take place on 4 December

From what we are hearing, it seems like OPEC+ will have a tough time managing the supply and demand next year. The demand is expected to be lower, while stockpiles are expected to increase, which would mean lower Oil prices. Non-OPEC production is also expected to surge in 2020, so everything is pointing down for Crude Oil. Crude Oil continues the bearish reversal.