Oil prices won’t rebound until production growth slows, as even political risks in the Middle East and Africa remain secondary to the glut on crude markets, said Pulitzer Prize-winning oil historian Daniel Yergin.
“There is a surplus of geopolitical risk, but there is an even greater surplus of supply,” said Yergin, vice chairman of Douglas County-based IHS Inc., in an interview at the World Economic Forum, in Davos, Switzerland. “When the market will make a response in supply, there will be a response in prices.”
Current oil prices should slow production growth in the U.S. in the second half of the year and Canadian production after two years, as companies review budgets for projects, Yergin said.
He declined to give a price forecast.
Oil prices have slid more than 50 percent since June.
“Oil was the last holdout in the commodities super-cycle,” because of supply disruptions that didn’t occur for other commodities, said Yergin, the author of the books “The Prize” and “The Quest.”
