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The oil price is taking breather today after racking up solid gains last Friday after a report showed the number of oil rigs decreased in the US for the second time in 2 months.

Oil production has been on the rise in America in recent months but it has failed to stop the reduction in supplies due to a number of factors such as production cuts from OPEC,

“Despite the fact that production has increased, it remains the case that inventories are falling,” said Ric Spooner, an analyst at CMC Markets in Sydney.

“It does indicate that the OPEC cuts are working. Prices remain in a range of about $44 to $52 at the moment.” He added.

Analysts at Citi bank predict that the oil price will be stuck in the $40 to $60 range over the next 5 years on the back of increased shale drilling in the US and as projects from countries such as brazil and Canada come on board.

This goes against prediction that OPEC cuts will eventually lead to a huge gap in the market and drive the oil price significantly higher

"This is contrary to the conventional wisdom forming and espoused by the likes of the IEA to the Saudis and the Russians among others, who warn that a supply gap is emerging imminently, perhaps by the end of the decade," Citi analysts wrote.