Oil prices could dip lower before marginal recovery

The strategy, formulated by the Organization of the Petroleum Exporting Countries (Opec) summit last December, was simple: Allow oil prices to fall below the $50/barrel level (Brent crude) to force contraction of production in non-Opec countries, enabling the cartel to maintain market share and eventually manipulate prices to a higher level.

Fast-forward by eight months, and the latest Opec monthly report appears to suggest that their squeeze on non-member countries is taking longer than expected to bite. Crude is trading at essentially the same level as the turn of the year and oil analysts are busy marking down their forecasts.

So, how did this “best-laid plan” go awry, and where is the oil price headed for the rest of 2015?