OPEC wants oil above $50, but US shale producers won’t play along
Growth in U.S. oil production is slowing, but will continue to blunt OPEC’s efforts to cut supply and normalize global inventories, keeping benchmark prices capped at around $50 a barrel this quarter, according to a CNBC poll of energy strategists, traders and economists.
De facto OPEC leader Saudi Arabia is leading calls to deepen production cuts as it battles perceptions of falling compliance. Doubts over OPEC’s commitment to supply curbs tipped benchmark oil futures into a bear market in June.
Elsewhere, OPEC is also squaring off against familiar rivals.
Attempts to prop up the price of oil by the producer group have encouraged U.S. suppliers to put more oil onto an already over-supplied market. But bulls say that’s changing as American production shows signs of leveling out and recent declines in U.S. inventories point to market re-balancing.
Written by Sri Jegarajah and Dan Murphy for CNBC.com