“This became particularly obvious recently, when OPEC and its partners decided to extend their production cut agreement for another nine months, and contrary to expectations this failed to improve prices. Actually, prices fell as U.S. shale drillers continue to add drilling rigs,” according to OilPrice.com.
Some market observers believe it is possible OPEC and shale producers could come together to find some common ground on production and prices.
Some oil market observers see more declines coming for crude. 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.
For more information on the crude oil market, visit our oil category.