Analysts who were bullish about oil briefly breaking through the “psychological barrier” of US$50 per barrel began getting a cold dose of reality late last week, as prices slipped back and early reports indicated little prospect of a deal to limit production when OPEC countries meet tomorrow in Vienna.

Last Friday, prices fell for a second day in a row, “as some investors took profit on a surge to seven-month highs while others worried about higher production with the market hovering near $50 a barrel,” Reuters reported. “People are worried crude production will come roaring back at these prices,” said Chicago-based analyst Phil Flynn.

Some traders also had short-term concerns about being stuck with U.S. oil contracts while markets were closed for the three-day Memorial Day weekend. “You don’t want to be long on a $50 position when oil could be below $48 by the time the new week opens,” Flynn explained.

Last week’s headlines focused on a price range of US$49.32 to $50.51 per barrel for benchmark Brent crude oil, or US$49.33 to $50.21 for U.S. crude. But the industry may face a bigger price threat in the course of this week, as the Organization of Petroleum Exporting Countries (OPEC) convenes in Vienna.

At that gathering, OPEC members “are expected to go along with a Saudi Arabia-led policy focused on squeezing out rivals, amid signs the strategy is working,” Bloomberg reports, even though individual OPEC countries need global prices between $52 and $195.20 to break even on their national budgets. Reuters notes that Iraq ramped up production in the days leading up to the meeting, at the same time that Canadian production (outside the OPEC umbrella) comes back online after the Fort McMurray wildfires.

“We do not expect any agreement on a specific production target to be achieved” during the OPEC meeting, wrote analysts at Frankfurt-based Commerzbank AG. “Iraq plans to discuss freezing oil production, but Iran and Saudi Arabia are unlikely to be ready to take any such step.”