While observers are waiting for the global economy to rebound, after the first steps of recovery from the Corona epidemic began, due to vaccines, which reached a “relatively” high rate in major economies, a report predicted a rise in oil prices this summer.
A report prepared by the Washington Institute for Middle East Policy revealed that the expected rise is caused by the current dispute over production quotas in OPEC Plus.
The report stated that “while the world is recovering from the pandemic, the global economy is gradually recovering, but the countries of the “OPEC Plus” group, which includes “OPEC”, that is, Saudi Arabia and other countries, which are trying to work in coordination with exporting countries such as Russia and Kazakhstan, cannot agree. about how much oil to produce. The result is higher prices."
A dispute prevails between Saudi Arabia and the UAE over production quotas, as the UAE insists on raising the main production line by 0.6 million barrels per day to 3.8 million barrels, given that the current ratio set (3.17 million) in October 2018 does not reflect its full production capacity.
OPEC members and their allies in the "OPEC Plus" group canceled their meeting last week, without specifying a new date, due to the dispute between the United Arab Emirates and other countries.
And this failure in negotiations, if not resolved, may lead to an extension in August or even later, to the production quotas applied in July and not to the 400,000 barrel increase that was offered at an earlier stage.
But “Bloomberg” agency said Sunday that for some money managers in the world, the OPEC + dispute over oil prices is nothing more than a sideshow when it comes to emerging markets, and thus the global economy in general.
Investors and strategists say the economic recovery after the pandemic will increase demand for raw materials across the board, regardless of whether a deal has been reached.
Russia and Colombia are among the countries that will benefit from the situation, according to Whitney Baker, founder of New York-based Totem Macro, which advises funds that oversee more than $3 trillion.
While the Washington Institute for Middle East Policy report believes that this situation will have domestic political repercussions in the United States.
The report quoted question marks in the United States, and said, "Ordinary people will ask what is going on, why are countries like Russia and Iran benefiting from this situation? And why do our allies, Saudi Arabia and the UAE, disagree publicly about vague details of production levels, production capabilities and quotas?" In reference to the uncomfortable oil market situation, and the restlessness due to differences in production quotas.
Oil prices rose for a second day last Friday, as data showed a decline in US inventories, but it is heading for a weekly loss amid uncertainty about global supplies after the OPEC Plus impasse.
Brent crude futures settled by 1.93 percent, or $1.43, rising at $75.55 a barrel.
US West Texas Intermediate futures also settled 2.22 percent, or $1.62, up at $74.56 a barrel.
Prices on both sides of the Atlantic were on their way to a weekly decline of about 1 percent, according to the American "CNBC" news network, affected by the collapse of talks between the Petroleum Exporting Organization (OPEC) and other allies, including Russia, known together as OPEC Plus.
And the US Energy Information Administration said, on Thursday, that US crude and gasoline stocks fell, and demand for gasoline reached its highest level since 2019, in a sign of the recovery of the economy, after the acceleration of the vaccination pace in the United States.
"The upbeat stock report from the Energy Information Administration helped the oil market recover," the network quoted expert Stephen Brennock of the oil brokerage PVM as saying.
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