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Others were equally skeptical about the prospect of markedly higher prices. The decision to rein in production by members of the Organization of Petroleum Exporting Countries at an Algiers meeting last month succeeded in pushing prices above US$50 a barrel, but a sustained rally will be held back by the return of shale oil production from fields previously rendered unprofitable by the two-year slump in crude, the head of the International Energy Agency said.

“This upward pressure on the prices would stimulate some high-cost producers to increase their production, such as the U.S. shale oil,” Fatih Birol said Tuesday in an interview. “The price level around $60 would give a strong impetus to the bulk of the current U.S. shale industry.

The bosses of three of the largest oil traders — Vitol Group, Gunvor Group Ltd. and Mercuria Energy Group Ltd. — forecast prices would be between $55 and $58 a barrel in a year’s time.

That will offer precious little respite to economies under pressure from lower prices. Saudi Arabia, which relies on income from crude to fund public expenditures, has cut wages and spending to reduce a budget shortfall that grew to 15 per cent of economic output last year, the widest since 1991. It needs oil to be well above $60 a barrel to balance the budget. Fellow OPEC member Venezuela has seen its finances decimated by oil’s collapse, leaving the government struggling to find enough hard currency for imports of basic necessities.

While producers have cut costs, most still need oil well above $50 to meet spending commitments and pay dividends to investors.

The industry got “too big” and spent too much, BP chief executive Bob Dudley said at the conference, and the company now only invests in the “best projects.” Hess Corp.’s John Hess said producers need as much as $80 a barrel for “long-cycle” developments.