NEW YORK (TheStreet) -- One expert sees downside risk to oil, now that OPEC has decided to maintain its production target of 30 million barrels a day. Jamie Webster, senior director for global oil markets at IHS said that over the next couple of months, there's more downside risk to prices, which he believes could fall into the upper $50-a-barrel range.
Webster said the recent drift higher in prices could re-incentivize U.S. shale producers to increase production, which would then put downward pressure on prices. Webster sees demand growth this year at 1.3 million barrels a day, more than double last year's numbers, but demand isn't strong enough to overwhelm excessive supply.
Webster anticipates strong demand for oil within the U.S., and "sizable demand growth" within China. He noted that OPEC's recent decision was similar to its November move, when members decided to roll over the production target.
Webster noted, "There's a recognition that there's still a lot of threats in terms of their market share globally and internal to the organization. There's a recognition that Iran might come back, or Iraq production might come back. So at this point there's no political consensus to be able to move to any sort of different production target."
Even if oil prices start to fall, Webster said it would still be difficult for OPEC to make any sort of production change. Generally OPEC is a very reactive organization.
"There's no question that OPEC has lost some clout," added Webster. "According to their own balances, they should be producing less than they are right now. There are certainly some signs or discussions about OPEC being dead or that OPEC is no longer relevant."