The oil price is treading water today, failing to find a direction with some analysts believing that the recent down trend will continue on the back of bigger output from the US.

Oil is now down 20 percent since the start of the year and not even extended production cuts agreed to by Opec, and Non Opec members such as Russia, to remove excess inventories from the market, has been enough to stop the slide.

An even bigger problem now is the amount of oil being produced in the US, which is growing by the day and according to some has not been fully priced into the market and poses a real danger to the oil price,

“The other factor underestimated by OPEC has been the rebound in U.S. production from both the Gulf of Mexico and the shale producers. We have only just begun to see the shale output hit the market from the attendant rise in the U.S. rig count. U.S. production could hit 10 million barrels per day by year-end, from 9.3 million”

Analysts at JP Morgan also believe the price is going lower as history shows that even though Opec agreed to production cuts, not all members will be willing to comply and will simply release more oil to the market,

"By early 2018, the combination of record U.S. production and deteriorating OPEC compliance probably returns average prices to the mid-to-low $40s," they said.

Also with new technology coming on board, the amount of money to produce a barrel of oil becomes lower which will also prove attractive to US drillers,

"Rising U.S. output continues to stress markets, with increasing evidence that improved efficiency and technology makes many of the shale plays profitable below $40 a barrel," said analysts at Cenkos Securities.