“I think it will be extended, and it [decision] won’t affect the prices dramatically,” McConnell said. “I think it’s part of the stabilizing influence that will be probably welcomed. I think the OPEC situation and the deal is not a governing factor for how the market will go forward. It is a part of it, but it’s certainly not a driving force.”
McConnell believes that as technology continues to get better, the shale in the United States will become more economically attractive while competition and the ability for that shale to play in the global market will also drive global decision-making forward.
“Today everything tells me that over the next several years we can steadily watch oil prices begin to rise again because of that lack of investment right now and the fact that it’s forward-viewing and it won’t impact us for the next two or three years,” he noted. “When we get to that point we won’t have invested, we will have a bit of a supply shortage. People will continue to use fossil fuels, and the demand for global oil will drive up prices again.”
The former official went on to say that this will prompt everyone which will bring the prices down over some period of time.
“I think this whole dynamic that we are in today we can expect rising and falling prices to happen more frequently and sometimes very abruptly,” McConnell said. “At the end of the day if you look at it over the long-haul, there is going to be some up, and there is going to be some down and the market will drive it.”
“Small things to the side of trying to manipulate through agreements I think become less and less important these days, because OPEC’s not the driving force anymore, technology is,” he stated.
The accord was supported by 11 non-OPEC states, including Russia, which had joined the deal by promising to reduce oil output by 558,000 barrels per day.
The deal caused the price of crude oil to climb to $55-56 per barrel, boosting optimism in the energy market.