OPEC+ dispute may be resolved “sooner or later”: analyst

Russia is According to reports, an attempt was made to negotiate a resolution.

Neil Beveridge, Bernstein’s senior oil analyst, said OPEC’s policy has always been focused on controlling supply to manage prices.

But the UAE believes that peak oil demand is “facing OPEC” and is considering chasing market share rather than high energy prices, he told “Capital docking” On Thursday, this is why it hopes to obtain a higher quota.

Observers said that if OPEC does not reach a new agreement, there may be two situations. The first is the collapse of prices.

Beveridge pointed out that OPEC now has nearly 6 million barrels of idle capacity. He said that if countries decide to increase supply and strive for market share, there may be “great downside.”

“We can see that oil prices will definitely fall back below $50 again… soon, if [happens],” He says.

The second scenario is that countries continue to produce oil based on previously agreed quotas. Oil prices will soar, It may be as high as 100 US dollars per barrel, As demand exceeds supply.

Schork said OPEC may not want to waver in either direction.

“They are in a very good position at this point,” he said. “Why engage in a potential price war?”

On the other hand, excessive oil prices are not ideal. “The higher we go, the more you will start to hear the political wind against them, especially in the United States,” he added.

Schork stated that he believes that the UAE will be allowed to increase production and that the country will stick to their quota.

“They just want a bigger share of OPEC bonuses,” he said.

However, Bernstein’s Beveridge said that other OPEC+ members may want to increase their production quotas.

“This may lead to the complete collapse of the OPEC agreement we reached… This will definitely point to a very significant downside. [for] Price,” he said.

He said that the agreement will only work if everyone promises, but he pointed out that OPEC member states have “very abided” in the past 12 months.

Schork said that in the long run, the oil production alliance will benefit from the energy transition.

He said: “As Occidental Petroleum works to decarbonize in the next few years-and they are already doing so-OPEC’s share of the global oil market will continue to grow,” he added, oil demand may be Increase increased to the end of this century.

“All OPEC participants should perform well, so yes, I do think we will see a solution to the problem sooner or later,” he said.

— CNBC’s Sam Meredith, Weizhen Tan and Dan Murphy contributed to this report