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Most analysts say OPEC needs to conform better with the limit to keep supply from overwhelming demand. Societe Generale says the necessary reduction could be substantial. The Centre for Global Energy Studies says prices may tumble without output curbs.

OPEC accounts for 40 percent of global oil supply.

Seth Kleinman at Citigroup said OPEC are going to have to keep cutting, the market is heavy in terms of supply and getting heavier, while supply growth will be robust and demand will consistently disappoint.

Mike Wittner at Societe Generale said OPEC output has been creeping up, and the balances show that they should be producing significantly less – this is the first year where OPEC, and the Saudis in particular, have to cut to offset the US growth. Wittner said OPEC production will probably rise in Q3 with the summer peak in demand for driving fuels in the northern hemisphere, and for power to generate AC units in the Middle East, and because some of the extra Saudi output is consumed domestically, it won’t exacerbate the global surplus or weaken prices.

US crude production rose to 7.4 million barrels a day earlier in May, the most since 1992.

Jamie Webster at PFC Energy said it is a cold war right now, and it’s going to get hot within the next couple of years.

The median analyst expects Brent to rebound to an average $110 a barrel in Q3 and Q4

Leo Drollas at the CGES said eternal vigilance is the price of keeping oil at $100, and expects OPEC to get back to 30 million barrels a day by Q4, otherwise the price will eventually fall heavily.

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