Daily Market Briefing
Yesterday, the Joint Ministerial Monitoring Committee (JMMC) met in Azerbaijan to review a monthly report and evaluate the recent global oil market developments. The JMMC is a joint OPEC and non-OPEC committee, established in December 2016 when oil producers, both OPEC and non-OPEC members, entered into a production cut agreement. Till now, the JMMC consisted of 3 OPEC members and 2 non-OPEC countries (Russia and Oman), but at the meeting yesterday, the committee welcomed 4 new members (Iraq, Kazakhstan, Nigeria and the UAE).
The committee yesterday stated that it has decided to cancel the extraordinary OPEC/non-OPEC meeting planned for April and postpone it to June where the parties will meet in Saudi Arabia. According to the committee, compliance to the current oil production cut deal reached almost 90% in February, up from 83% in January.
Venezuela, hit by U.S. sanctions, has managed to reopen its main oil terminal which closed due to power blackout last week. The country could allegedly direct the crude oil which was supposed to be shipped to the U.S. to Russia instead.
The financial markets are eying tomorrow’s U.S. central bank meeting where a statement and an interest rate decision are published. So far this year, the Fed has left interest rates unchanged and market participants do not expect a hike this time around, but depending on the message in the statement, some market volatility could arise, potentially spilling over to the oil market. Also the uncertain situation in the UK where a “hard Brexit” is approaching contributes to the volatile economic environment both in the UK and the Euro Zone.