Oil Prices Won't Break Out Anytime Soon and May Drop Further: Analysts

Pedro Parente, CEO of Petrobras, believes oil will remain in the $50-$55 range in 2017

Oil Price Information Service says oil will have to reach $54.50 to convince traders that prices are truly breaking out – but John Kilduff, founding partner of Again Capital, believes crude is already at the upper end range and won't budge much further.

Those were the sentiments being bandied in media circles as analysts turned their attentions from the recent agreement by the Organization of the Petroleum Exporting Countries (OPEC) to limit production and towards a meeting of producers next week in Istanbul, which is already shaping up to be a bust with Russia declaring it won't buy into the cap deal.

Even though Tom Kloza, global head of energy analysis at Oil Price Information Service, thinks "the OPEC honeymoon will continue for quite a while," he maintained that $54.50 is what market technicians are truly waiting for – but that futures will likely bounce between $48 to $54 until OPEC convenes for its official meeting in Vienna on November 30.

He also told CNBC that "I just don't see any way that we get a $60 average for a month within the next 12 months."

Kilduff's view is equally grim: he thinks the current price rally will unravel between now and November. 30, with the crude market losing support if OPEC members give traders reason to doubt that a deal will happen (which arguably already has occurred), or if U.S. production shows signs of recuperating as prices rise.

He said, "I think this is the upper end of the range where we are now; I don't think we'll see new highs."

Pedro Parente, CEO of Petrobras, is equally conservative in his outlook: he told CNBC that oil will remain in the $50-$55 range in 2017 and may climb to $70 in 2020-21; he added that these figures are based "on forecasts made by respected institutions around the world."

Still, oil in the low to mid $50s isn't bad news for everyone: in fact, Andrew Kamau, principal secretary at Kenya's State Department of Petroleum, told media that this is a break-even range for his countrey and that current prices will not deter a project to build an 891 kilometre pipeline between Lokichar and Lamu on Kenya's coast.

Kenya, which has an estimated 750 million barrels of recoverable reserves in onshore fields, will begin transporting 2,000 barrels of oil per day down to the coastal port of Mombasa in June.

Venezuela is another country that will settle for middling oil prices: last week, Vladimir Zaemsky, Russian ambassador to the ailing Bolivian republic, told media that "Caracas hopes for the world's oil market to stabilize in the range of $50-$60 per barrel, which is preferable for the Venezuelan economy and will allow the country to smoothly resolve its current problems, stick to the government budget, and secure investments into the sector."