Asked about the main oil price drivers in the near future, Kapusta said, "The main driver that I see is the growth of North American unconventionals continuing to grow and exceeding everybody’s expectations".
Kapusta pointed out that oil production has been "tremendous" and given that the United States has had excess capacity the only option it had was to export. However, the result of the United States’ moving to the export market has been a downward push on prices, including US prices. "So, I can see that’s happening and that’s going to have a negative push on all prices", Kapusta said.
Kapusta noted the demand side of the equation and pointed out there has not been a surge in demand.
Kapusta said he expects the oil price will stay between $60 and $80 over the next one-and-a-half years. "My expectation is that it will continue stay in the range where it has been, which is somewhere between $60 and 80… at the end of this year and I would say into the next year", Kapusta said.
Over the last couple of years, world oil prices have been influenced by the 2016 OPEC-Non-OPEC deal on oil production cuts, which was concluded to support oil prices. On 7 December, participants of the OPEC-non-OPEC 2017 oil output reduction deal agreed to reduce overall production by 1.2 million barrels per day starting in 2019, giving rise to fears that oil prices might go too high.
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