Oil price forecast: Trump and US shale set to keep prices below $50 | City & Business | Finance

Crude oil has tumbled to three-week lows just days after major producers led by Saudi Arabia agreed to extend an output cap for another nine months.

OPEC had hoped the deal would boost prices and income for members of the cartel.

But the price fall appears to shows OPEC’s control over the market has continued to wane.

And Middle East grip on oil prices is set to weaken further amid tough measures from the US led by Donald Trump.

US shale producers have completely changed the market over the past couple of years – and the American president is backing the sector for further gains.

John Redwood, Charles Stanley’s chief global strategist, said: “10 years ago the US produced 5.1m barrels of oil a day. By last May this had risen to 8.8m barrels a day.

“This May the US is hitting 9.3 m barrels of daily output.

“President Trump is taking a different view to former President Obama over some of the environmental issues involved, placing more emphasis on the desirability of creating more oil industry jobs with a view to having more output.

“There is considerable scope for more oil and gas development amidst the various shale sands and other untapped deposits of the country.”

The prospect for more supply heading into the market is set to counter OPEC measures to cap production and keep price rises in check.

FXTM vice president of market research, Jameel Ahmad, said: “I maintain the viewpoint that the mindset of investors will remain tilted towards sell-on rally opportunities and I think traders are likely to continue entering selling positions around $50 as they have done for a number of months.

“The negative expectations on the oil markets are not due to a lack of effort from the side of OPEC; it is more linked to the belief that US Shale producers will turn the volume up on increased production.

“The ongoing threat to investor sentiment when it comes to the oil markets is that no matter what OPEC try to do to rebalance the ongoing oversupply in the markets, US Shale…

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