OPEC Members Not Comfortable With Current Oil Prices: Analyst

Barry Dawes credits OPEC for consistently "decreasing" its output this year.

As the week and the bad taste of the International Energy Agency (IEA) report disclosing that the global oil glut will last into 2017 wanes, analysts are once again offering their opinion about the Organization of the Petroleum Exporting Countries' (OPEC) near-term influence on the market – and once again, the opinions conflict.

Reza Amanat, deputy editor, crude markets (Middle East & Asia Pacific) for Argus Media, told CNBC that "OPEC share has increased in terms of exports but increasingly you're hearing lots of OPEC members pushing for a freeze on production, and what that tells you is a lot of the members are not comfortable with where prices are at the moment."

He added that Saudi Arabia's seeming willingness to consider a freeze when OPEC members meet to discuss the issue in Algeria later this month "is an indication that maybe they're not comfortable with prices as they are either."

Meanwhile, in the same media outlet, Barry Dawes, head of research for Paradigm Securities, said, "this year, almost every month, OPEC members increased their demand numbers and also decreased their production numbers, so the oil balance I think is much closer than the IEA is suggesting."

Dawes's comment – which seems remarkable in the face of key OPEC members boosting their output to record levels in 2016, and the latest analysis from Bloomberg indicating overall OPEC production rose to a record 33.7 million barrels a day in August - was left unchallenged by the CNBC panel, and he added that "The demand for energy and supply is coming together ... we've seen transportation fuel in the last few years still rise in the double digits in China and India, so I'm pretty comfortable that the underlying demand is there."

Dawes may have escaped on-air debate over his remarks, but when it was suggested to Amanat that even if OPEC members agree to a freeze it won't affect the glut because of the enormous amount of crude being produced, he replied, "if they're freezing at [record high levels], obviously the rebalancing of the market will take longer."

Meanwhile, with oil prices rising about 2 percent on Thursday and ending a two day slide caused partly by the IEA report, Jay Hatfield, portfolio manager at InfraCap MLP, observed, "I think the oil market clearly overreacted to the products build data we had yesterday, and that's indicative of today's price rebound."

It fell upon Scott Shelton, broker with ICAP, to voice the ongoing problem that is keeping oil at the $45-$50 level with a likely swing into bear territory in the near future: "The perception of more supply from Nigeria and Libya is trumping the physical markets.

"The market could care less about strong physical markets when it sees potential for another 600,000 barrels per day of crude."

If nothing else, the opinions voiced on Thursday demonstrate that anything is possible in the analytical world, and they come on the heels of Jim Tisch, president and CEO of Loews Corp, stating that oil over the next two years will climb to $70 to $80 per barrel because the industry is dramatically under investing in production capacity at present.