$XLE $USO $UWT - With crude oil trading near three-year highs and stockpiles falling, more analysts see a growing probability that the OPEC-led production cut extension may not last until the end of the year.

If Brent is still trading near $60/bbl and oil inventories are close enough to OPEC’s five-year average, the deal could be phased out early, says Harry Tchilinguirian, head of commodity strategy at BNP Paribas and one of several analysts who now predict such an outcome.

Besides, if OPEC and its allies are not producing, the U.S. will: The IEA predicts U.S. crude output should climb to a record 10.4M bbl/day this year, surpassing Saudi Arabia and rivaling Russia.

"The higher the price is, the more production we are going to get out of the U.S., which threatens the price," says James Williams of WTRG Economics. "We are in that threatening cycle right now."

But WSJ's Spencer Jakab thinks the ingredients are in place for a potential demand shock, arguing that China is running low on crude oil storage space after aggressively filling inventories and passenger car sales in the country rose at their slowest pace in more than a decade last year.

https://seekingalpha.com/news/3324008-specula...ction-deal