(MENAFN- ProactiveInvestors)The oil price appears to be holding range bound in the low sixties in recent weeks. The dollar is struggling but showing resilience and higher American production is adding to the woes of the market. In early trading on Friday Brent crude was priced around US$64 with WTI holding just above US$60 a barrel. The big investment banks are eyeing the market with caution. Goldman Sachs Group sees production from Saudi Arabia at record levels with no slowdown currently above 10mln barrels a day. Citigroup expects the Kingdom to increase production even further possibly adding another million barrels a day. Both banks agree that Saudi Arabia is now focusing on maximising sales to pressure non-OPEC producers. The head of commodities at Goldman Sachs Jeff Currie calls it the 'new oil order we live in' with the US now taking over the role of swing producer. Citigroup sees that Saudi has decided it no longer needs excess spare capacity hence the push to produce more. The rig count has been falling in recent months and its currently at its lowest in almost five years although annual production is looking strong. The Baker Hughes update has never been so carefully watched and American stockpiles are also shrinking. Despite the lower data the market continues to be oversupplied by about 1.8mlm barrels a day in the first quarter according to Bloomberg. A report from the research and brokerage company Global Investment House sees the recent rise in oil price being supported by the weakening of the US dollar inventories drawdowns high demand at the start of the North American driving season and supply concerns in the Middle East following fighting in Iraq Yemen and Syria. The report warns of 'more oversupply as a result of OPEC's decision to keep pumping crude without restraint capped gains.' The American economy is showing signs of moderate growth after a slow winter and the data suggests it is likely to soon be strong enough to support an interest rate increase by the end of the year. There are still concerns about growth in consumer demand and employment and the essential recovery of the labour market according to Federal Reserve officials. Global Investment House saw a contraction in the US economy in the first quarter by 0.7% 'driven by bad weather along with a slowdown in consumer spending and the strengthening of the US dollar' but the forecast for the second half is looking better. The first quarter also saw a significant reduction in investment by energy companies in exploration and drilling as a result of the drop in oil prices over the past year. The uncertainty continues in the market a situation analysts and investors may not be comfortable with but are learning to live with.
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