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Oil: OPEC vs. U.S. shale

 
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.

President Donald Trump gestures as Saudi Arabia's King Salman bin Abdulaziz Al Saud (R) stands next to him during a reception ceremony in Riyadh, Saudi Arabia, May 20, 2017.

"It's still sheikhs versus shale," said John Driscoll, director of JTD Energy Services in Singapore and a former oil trader whose career spans nearly 40 years. "I would put an average price for [the third quarter] at just under $50. In the past year it's like Brent was following the U.S. speed limit: 55 max."