No significant changes are expected in oil prices due to the upcoming OPEC meeting. Oil prices rose as much as 2% on Tuesday June 2, driven by a weak dollar, and expectations that U.S. crude supplies could have fallen again last week for a fifth straight week. We’ll be able to confirm this story tomorrow when EIA releases its weekly oil inventory report.

There may be a slight price increase on Thursday and Friday, which is expected to be followed by a decline.

The next OPEC meeting is scheduled for June 5 in Vienna, which may provide a more definitive direction of where oil prices are heading. So far it looks like the stay-the-course mentality dominates as Saudi Arabia is continuing its effort to attain market share from higher cost providers. It seems like the oil kingdom may have not achieved the results they were hoping for by deciding to leave the cartel’s output quota unchanged in the past 6 months. In addition, US oil production has not yet declined enough to see considerable price changes.

OPECIn all likelihood OPEC will leave oil output the same, however that decision is likely already factored into the price of oil so no significant move in prices is expected in the days and weeks ahead. It would be rather surprising if OPEC does change its production level – in that case oil prices will soar.

Although US oil rigs continue to decrease in numbers at a much slower rate than expected  (last week active rig count was down by 10), drillers are squeezing out more efficiency in their operations, and breakeven prices may have fallen by $10 to $15 per barrel, according to Wood Mackenzie. With oil prices hanging around $60/barrel US shale drillers now face a dilemma. Some oil executives have implied that they may deploy more rigs back into the field in the near future. However, there is no sign that oil drillers are returning to the oil patch all at once, or at least not yet.

And while it may make sense for individual firms to drill a few more wells to improve cash flow, if hundreds of companies do the same thing at the same time, the collective increase in oil production would send prices back down, hurting all involved.