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This far into 2017, week after oil trading week has ended on very familiar territory with both Brent and West Texas Intermediate (WTI) – the world most watched crude benchmarks – stuck above the $50 per barrel mark.

While that gives crude producers some much needed price stability, the market seems to be utterly devoid of drivers exerting a pull towards $60, which some had impatiently forecast after 11 major global exporters, including Russia, joined hands with Organization of Petroleum Exporting Countries (OPEC) to institute co-ordinated cuts collectively designed to take 1.788 million barrels per day (bpd) out of the global supply pool at the start of 2017.

Moreover, the promised cuts do appear to be taking place and at a steady pace. Price aggregators such as S&P Global Platts and the International Energy Agency have both opined in recent weeks that compliance might as high as 90% in OPEC’s case and rising. If that is reflected in shipping data for February, OPEC could well achieve its targeted reduction of 1.2 million bpd by early March.

However, in near tandem with the OPEC and non-OPEC cuts, deemed an upside risk for the oil price, comes a familiar, feared downside risk – that of US producers upping their output level in response to a relatively better and more stable oil price environment.

Data is pointing to just that. Many of the weekly rig counts released by Baker Hughes since 30 November, 2016 – the day OPEC inked its historic cut and revealed the drive would see non-OPEC participation – appear to indicate a steady rise in the number of American and Canadian rigs.

The latest count up to the weekly cycle ending 17 February, points to 751 operational oil and gas rigs in the U.S., up 237 on the year, and 331 rigs in Canada, up 125 year-over-year. If I reconcile that data with anecdotal evidence from legal circles in Houston, Texas, of rising American drilling permit applications; unquestionably things are on the up.

Agreed there is a caveat – the froth has gone out of the U.S. market and perhaps the industry stateside is better for it. Barmy prices for fringe drilling acreage appear to be a thing of the past, at least at the present moment in time. Yet, it is perfectly logical to assume that U.S. independents and others with viable shale oil prospection plays would have hedged (or are hedging) at $50 in the wake of the OPEC bounce, to keep themselves ticking.

In a sentiment driven market, that is enough of a downside risk to keep any potential price spike in check. It is precisely why I see little on the horizon that would see oil prices escape their current range, and if they do, balance of probability suggests the direction of travel would be down not up.

A case in point comes from examining the ICE Brent contract’s monthly price range, which been pretty narrow since 30 November, fluctuating by no more than $5 per barrel. David Wech, Managing Director of research outfit JBC Energy, says: “Prompt prices have not seen this kind of stability for several years, with the last two years – since OPEC’s ‘no cut’ decision in November 2014 in fact – having been roiled by significantly higher levels of volatility.

“Despite the cuts, there is no shortage of bearish indicators to be found in the market. Equity markets have continued to rise, not just in the US but in Europe and elsewhere. Crude curves remain in contango at the front end and physical crude differentials have come under marked pressure in many places as West of Suez supply has surged, with increased volumes having to price down to clear to the Asian market. After crude prices rallied in the aftermath of the cut decision in late November, there does not appear to be much out there to push prices decidedly above the $55 mark.”

Wech is not alone in his thinking. Most follow analysts I have spoken to over the past fortnight point to the fact that the ICE Brent forward curve is relatively flat, with the front month contract pricing very close to contracts several years out. One reading of the situation is that prices are at the level required to produce the marginal barrel. “If this is the case – and indications on US shale supply suggest that it is – then the $55 per barrel area starts to look quite solid,” Wech concludes.

Furthermore, OPEC and 11 other non-OPEC producers have ensured, at least for now, that the oil price has a floor courtesy of their output cut pact. As for inventories and market rebalancing, the exuberance expressed in some quarters that the market would meaningfully rebalance in 2017 is not something I share. If anything, many commentators are hedging their bets too.

In a recent note to clients, analysts at Société Générale’s commodities research team wrote: “Decline rates for U.S. shale wells are still steep, but initial production levels, production profiles, and ultimate recovery volumes have increased. Going forward, higher production profiles mean stronger aggregate supply.”

Concurrently, Goldman Sachs told its clients that high fuel inventories and rising U.S. crude production imply “oil markets would be over-supplied for some time, but that they would drain gradually.”

“We view the faster shale rebound as creating downside risk to our 2018 WTI price forecast of $55 per barrel, but not to our expectation that the global oil market will shift into deficit in the first half of 2017,” the global investment bank added.

That remains to be seen, and to a large extent depends on the OPEC’s patience in general, and Saudi Arabia’s in particular. It is important to remember that current production levels would almost certainly be up for discussion when OPEC next meets on 25 May, with no guarantee the ongoing cuts would be extended.

If the figure of North American rigs keep rising steadily up until then, as I fully expect it to, it will be hard for those producers cutting output to ignore the words of former Saudi Oil Minister Ali Al-Naimi that OPEC’s role is not to “subsidize marginal producers.”

Rather bizarrely, regardless of the challenges the market faces over the next few months, speculators remain convinced about a bull run. The latest weekly CFTC Commitment of Traders (COT) report (to 14 February, 2017) shows that hedge funds and other money managers have a record long position in oil while short positions appear to be in retreat.

However, I advise caution for the months ahead. To me the oil market appears to be going nowhere fast, and the current near-equilibrium in the oil price is likely to last a while longer, with bearish and not bullish fundamentals lurking in the background.