Saudi Arabia wants crude oil prices to rise to around $60 a barrel this year.
That is according to a report by the Reuters news agency quoting sources from OPEC countries and the oil industry.
Around $60 is the level the Saudis and their Gulf allies – the United Arab Emirates, Kuwait and Qatar – believe would encourage investment in new fields but not lead to a jump in output by US shale oil producers.
An agreement last November by OPEC and other major producers to pump less pushed up prices by $10 a barrel and appears to be holding, but analysts expect benchmark Brent crude to be short of $60 this year, averaging $57.50 dollars a barrel.
In recent weeks it has been trading around $56 a barrel.
The problem for the traditional producers like Saudi Arabia is that the break-even price for US shale oil producers fell last year to an average of $35 per barrel, according to a report from consultancy Rystad Energy issued earlier this month.
Huge cost-decline in US tight/shale #oil industry. Wellhead #breakeven prices now 50% lower than three years ago. Chart by
RystadEnergy</a>. <a href="https://t.co/sh0HEfAtE1">pic.twitter.com/sh0HEfAtE1</a></p>— Ketill Sigurjonsson (AskjaEnergy) February 20, 2017
US shale producers started to step up production again when crude prices first topped $50 a barrel in May 2016. Advances in technology have made it easier for them to adapt quickly to oil price fluctuations.
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