“The price of West Texas Intermediate (WTI) crude oil is set to plummet to $75 per barrel as increased use of shale oil in the U.S. blots out demand for the energy source, one expert told CNBC.
Andrew Su, CEO of Sydney-based commodities trading firm Compass Global Markets, gave a bearish forecast for WTI on CNBC’s “Asia Squawk Box” on Tuesday, saying its value would drop around 18 percent in value by the end of the second quarter of 2013 and even further beyond that.
“Shale oil is the reason why oil prices fell last year and the reason why it will continue to fall in the next few years,” said Su.
“Shale oil will reshape the way that the entire oil industry is run and the U.S. will become an exporter of oil in next five to 10 years. That will have a significant impact on the U.S. and the global economy,” he added.
Shale oil – also known as kerogen oil – is an unconventional form of oil extracted from shale rock formations, only made possible in recent years through technological breakthroughs.
The revolution in shale oil and gas production has the potential to give the world’s largest economy energy independence and provides a substantial threat to the competitiveness of oil.
According to a PricewaterhouseCoopers study published in February, shale oil will contribute 14 million barrels per day towards global oil supply by 2035, roughly 12 percent of the global oil supply today….”
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