OPEC struggling to maintain price of oil with US production gains

Bloomberg/Fuel Fix:

OPEC’s best adherence to its production ceiling in 18 months is failing to buoy the outlook for crude oil prices, raising pressure on the group to pare supplies amid burgeoning U.S. output.

While all but one of 20 analysts in a Bloomberg survey predict the 12-member organization will maintain its target of 30 million barrels a day at its May 31 meeting in Vienna, most say OPEC needs to conform better with the limit to keep supply from overwhelming demand. Societe Generale SA says the necessary reduction could be “substantial.” The Centre for Global Energy Studies says prices may tumble without output curbs.

The Organization of Petroleum Exporting Countries, which accounts for 40 percent of global oil supply, hasn’t stuck so closely to its output ceiling since the current level was set in December 2011, according to data compiled by Bloomberg.

That hasn’t stopped Brent, against which more than half the world’s crude is priced, losing 6.6 percent this year, falling as low as $96.75 a barrel on April 18, amid a combination of slowing global demand and surging U.S. shale supplies.

“They’re going to have to keep cutting,” Seth Kleinman, head of energy strategy at Citigroup Inc. in London, said by phone yesterday. “This market’s looking heavy in terms of supply, and it’s getting heavier, and there will come a stage when OPEC needs to address that weight problem. Supply growth will be robust and demand will consistently disappoint.”
...

This is more evidence of how wrong Obama has been on energy policy when he said "We can't drill our way out of the problem" of high prices.  He was dead wrong then and still is blocking drilling on federal sites that would put more pressure on the cartel.

Keep in mind that this is happening with Iran sanctions taking their oil off the market.  That part of his foreign policy would also be in trouble without greater US production.   I expect to see more US production increases based on growth in Texas and despite the anti energy left policies blocking drilling in large prospects in California.

There are several links to articles talking about how OPEC is losing its grip on its price maintenance schemes.