“In a research note, Goldman Sachs has effectively demoted OPEC from a price setter to a mere inventory manager, with the cartel’s long-term control over international oil prices diminishing thanks to shale, which sports much faster returns: 6-9 months from final investment decision to peak production versus several years for conventional oil,” reports OilPrice.com.

Oil traders are concerned over how fast U.S. shale oil producers will increase production to capture the rising prices. Rig counts have recently ticked higher and with credit and earnings issues improving for some U.S. shale drillers, those companies may seize the opportunity to exploit higher pricing in the near-term.

“Several OPEC members have already expressed their readiness to take part in an extension of the cut or have at least acknowledged the need for such an extension. Even Saudi Arabia, OPEC’s largest producer, has softened its stance from being previously unwilling to further strengthen U.S. shale by extending the deal, to saying it would back an extension if inventories remain high,” according to OilPrice.com.

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