With oil prices rising, it could prompt US shale producers to come back in
As oil prices continue to rise, a fresh jolt in US production could just spoil all of OPEC's "hard work" in capping production over six months.
Bloomberg speaks to a couple of researchers and they all believe there are "unintended consequences" that could follow with rising oil prices:
Goldman Sachs
"Getting too far above $70 can both stimulate new supply and affect the economy; OPEC members do not want to see that".
Societe Generale
"The big concern is prices - are they worried about prices going too high too quickly? There are many reasons they'd be concerned, but top of the list is: how will U.S. production respond?"
Citigroup
"There is an unintended consequence from this higher price. OPEC are fearful of not only the shale response, but of deep water and of oil sands from Canada".
The re-entering of US shale oil producers was one of the factors highlighted yesterday here - with regards to what are the possible risks that could dampen the oil rally so far this year.
Brent crude is now trading at $69.40 - up 3.78% on the year, while WTI is trading at $63.95 - up 5.84% this year.
