Last week the IEA warned that rising non-OPEC production could put an end to the OPEC-fueled price rally that began in late November after the cartel’s agreement to cut production. With oil production bouncing back in the shale patch and a handful of other large-scale offshore projects set to come online, global output could prove resilient despite OPEC’s best efforts. That raises the prospects of a new trading zone for crude oil, trapped within a narrow band between $50 and $60 per barrel. OPEC’s cuts of 1.2 million barrels per day, plus the non-OPEC reductions of almost 600,000 bpd, will put a floor beneath crude at $50. The cuts ensure that the market will not be excessively oversupplied going forward, perhaps blocking another potential downturn in oil prices. On the other hand, the swift rebound in shale drilling could put a cap on prices, killing off any chance of […]