The analyst who accurately called oil’s bottom in in 2015 sees a boom for U.S. shale producers.
Tom Kloza, who runs the Oil Price Information Service, is crediting OPEC for his optimistic 2018 forecast.
“OPEC basically gave a Christmas gift to U.S. shale producers,” the company’s global head of energy analysis said this week on CNBC’s “Futures Now.”
The oil cartel decidedlast Thursday to extend production cuts through the end of next year. The purpose is intended to boost crude prices and prevent a glut.
But it comes with a price. In return, non-OPEC countries, such as the United States, have more of an incentive to increase their output.
Kloza said the U.S. surpassed 9.7 million barrels a day in crude output, including shale, on Wednesday — something that hasn’t happened since April 1971. Kloza predicts the number will get to 10 million by early next year.
“We may be at a record right now for shale,” Kloza said. “It establishes a stronger bottom for crude oil.”
“You hear these people talking about $70. Look, $70 is possible but it’s probably as possible as the Jets making it to the Super Bowl. So, it’s very, very improbable,” he said. “It would take an event, it would take some sort of disruption in Libya or Nigeria beyond what we’ve seen in the last couple of years.”