OPEC Predicts Higher Oil Demand This Year But Analysts Say The Cartel Now Has Little Influence Over Prices

Mohammed Bin Saleh Al-Sada is energy and industry minister for Qatar and OPEC president

Once again, the Organization of the Petroleum Exporting Countries (OPEC) says the market is rebalancing and predicts that demand will rise in the final two quarters of this year – but analysts counter that if prices rise, it will be due to basic economics rather than any initiative from the cartel.

Mohammed Bin Saleh Al-Sada, energy and industry minister for Qatar and OPEC's president, this week said that oil prices since February have experienced a steady improvement following a decline in crude production, supply outages, and a decrease in inventories.

He went on to state that recent price dips and overall market volatility are a temporary result of inventory overhang, and that with the expected improvement of major oil consuming countries' economies, "higher oil demand is expected in the 3rd and 4th quarters."

Al-Sada also noted that investment is needed to meet the demand growth and stem the natural decline of oil production from operating wells.

Tim Seymour, managing partner of Triogem Asset Management and founder of EmergingMoney.com, also holds an optimistic view of oil in the near term - but for entirely different reasons.

In a special `Behind the Trade' session on CNBC this week, he called crude's recent positioning "overbearish" and insisted that a setup for higher prices is coming due to the perception of a significantly stronger global economy and events such as Brexit failing to shake markets as initially feared.

Seymour also said, "Oil and the dollar, historically, have been negatively correlated; when oil was getting hammered, the dollar was spiking.

"The key is that in the last couple of days, they are trading together"; as such, Seymour believes that while gains for the dollar will be capped at $100, oil has breathing room and will likely settle in the $50 range.

Seymour's implication, which he more clearly stated in earlier media appearances, is that economic cycles justify a bullish outlook more than OPEC's latest declaration that it will reconsider a freeze.

Speaking to CNBC, Adam Longson, head of energy commodity research at Morgan Stanley, was even more dismissive of OPEC's influence on prices; although he takes the view that oversupply still has to be addressed before a fundamental recovery takes place, he derided the cartel for believing "they're the central banker of oil [and] just talking can move the market."

Longson said that while talk of a freeze "creates a bit of a floor, I wouldn't expect any material action that changes fundamentals."

Earlier this week, Seymour dismissed the importance of OPEC rekindling the idea of a freeze talks by pointing out that "nothing came out of Doha and look what happened to oil prices."