Yes Dukes, and there is hope. OPEC have been the power-brokers...

Yes Dukes, and there is hope.

OPEC have been the power-brokers for 40 years and they are not going to go down without a fight.They include the lowest cost producers including Saudi Arabia. The fight is for market share and OPEC are holding firm at high production.

Fortunately the US shale oil producers have recognised OPEC's position and competitiveness and have responded with a sharp cutback in exploration/drilling rigs over past 6 months. US Oil production has plateaued and will soon decline as some of the wells begin to reduce output.

OPEC, already have a sense that the US is responding rationally and will be watching and waiting for the best time to tune back the OPEC production a little to support price in the LT and the individual country budgets over the long term.

I think it is all playing out to script, it is just a matter of timing. (my guess is another 4-6 months before the POO starts to climb through the 50's and head for 60's.

FT