What an earth is going to happen to the oil price?

Fuel_BarrelsWhat an earth is going to happen to the oil price?  This is the question going around in my head at the moment.  The oil price has been creeping up almost unnoticed over the last month or so, as a % quite a lot, but in dollar terms not that much.  Its not recovered much of the ground it lost last year though and when you look at the graph in this article you can see why.  The whole of OPEC is pumping more oil except for some reason UAE.  Even Libya is managing to increase its output (although its not pumping very much).  Add in shale oil in the US and its obvious we have a glut with everyone playing beggar my neighbour.  The question is how long will it last and why are the Saudis so keen on keeping the oil price low?  At the moment the oil is being pumped and either sold at a loss or stored.  The underlying geography of peak oil has not altered.  Conventional oil has peaked (almost all non-OPEC oil is in decline) and shale oil a short term fix.  There are oil reasons to think despite this prices may not recover quickly, peak demand in OECD countries, slowing demand in China and a glut of oil stored.

Neil

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