Has OPEC won the oil war? Oil prices rebound after shale market collapse

Analysts say that the battle may not be over yet

Saudi Arabia's strategy of flooding the global markets with oil in an effort to hamper production by rivals such as Russia, the U.S. and other non-OPEC countries seems to be working. The oil producing giant has produced a little more than 10 million barrels of oil per day in April, and there is little evidence to show that they intend to reverse this trend.

LOS ANGELES, CA (Catholic Online) - The recent boom in shale oil and offshore drilling in the United States had brought the cost of oil down to about $45 a barrel in January, down from $115 almost a year ago. Now oil sits about $68 a barrel.

"There is no doubt about it, the price fall of the last several months has deterred investors away from expensive oil, including US shale," said one Saudi official during an interview with the Financial Times.

Data from the International Energy Agency backed up the Saudi's claim, showing that the number of shale oil rigs in the U.S. dropped by roughly 60 percent because of the lower oil prices. While the shale industry's "multi-year winning streak" may be over, they warned that it is too early to tell if OPEC actually has "won the battle for market share" that the multinational cartel had launched earlier this year.

But the Saudi's do not intend to give up their dominance of the oil market without a fight. "Saudi Arabia want sot extend the age of oil," the official said. "We want oil to continue to be used as a major source of energy and we want to be the major producer of that energy."

In December of 2015 OPEC decided to keep its oil output steady, not decrease it, in the face of increased oil production around the world. This caused a major collapse in the price of oil, which benefited the average consumer as far as the price paid at the pump, but seriously hampered non-OPEC producers.

The Saudi official said that it appears oil prices have "reached a bottom" and don't "look like it is going back."

However, OPEC has lost out on one major buyer, China, which in recent years has started buying more oil from Iraq and Iran than the Saudi run cartel.

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