Oil is headed for its biggest weekly loss since early March as signs that OPEC will continue with output reductions are offset by growing u.s. production and inventory gluts. Having tried and failed to spark some momentum yesterday (via Saudi jawboning and Goldman confidence), WTI Crude just plunged below $50 for the first time since March.

“It all comes down to whether OPEC can deliver inventory cuts,” Bill O'Grady, chief market strategist at Confluence Investment Management in St. Louis, said by telephone. “So far we haven't seen a lot of evidence that they're succeeding.”

It seems Goldman's muppets aren't buying it this time.

Erasing 70% of the early April bounce…

“We are once again seeing the emerging stalemate between OPEC and non-OPEC cutting efforts on one side and rising U.S. production on the other,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “We are currently testing the lower end of the range. This market is unlikely to go anywhere for the foreseeable future.”

OPEC has lost the confidence of the hedge funds.