OPEC and oil firms struggle to push crude prices above $50

World oil prices may struggle to sustain a push beyond $50 a barrel after hitting the key level for the first time this year, analysts warned.

Crude futures topped $50 a barrel on Thursday, as production disruptions in Canada contribute to a drop in US crude inventories. Prices have won support also from unrest in Nigeria, Africa’s biggest crude producer.

Prices slipped back on Friday however, as analysts warned that the week’s move above $50 could trigger some North American producers of crude extracted from shale rock to lift output.

Slumping prices, resulting in crude trading at under $30 a barrel in February from above $100 two years ago, made it unprofitable for some shale companies to compete with traditional producers like Organisation of Petroleum Exporting Countries (OPEC) and Russia.

Futures had plunged over a 21-month period owing largely to a global supply glut, fed by rising production of shale oil.

Oil at $50 is meanwhile viewed as a level at which it makes economic sense for certain suppliers to start pumping again, CMC Markets trader Alex Wijaya said. “Crude oil prices have failed to hold above the $50 level due to concerns that higher prices could unlock more supply,” he said.

Traders are now eyeing next week’s meeting of the OPEC in Vienna to discuss world production levels. “There is probably a sliver of hope that OPEC producers will hammer out an agreement to support oil prices, be it to freeze production or otherwise,” said IG Asia analyst Bernard Aw.

OPEC member Iran, which returned to world markets in January after the lifting of Western sanctions linked to its nuclear programme, has so far refused to curb production.