Despite oil prices hitting a four year high this week, they are expected to decline again in the second half of 2018.
The latest outlook from Deloitte says increased OPEC production and reduced demand are to blame.
Deloitte’s Andrew Botterill says increased drilling in the U.S. is another factor.
“We’re in a really high driving season right now so consumption is at its very highest in these summer months and usually softens when we get into fall,” he said.
But he expects prices will stay relatively firm.
Botterill adds the good news is the gap between West Texas Intermediate and Western Canadian Select is closing.
“We do expect that to be the case here through the summer, as I said, consumption is really high in the summer with a lot of driving and a lot of transportation going on, we do expect to see those things drop and be at the levels they are now,” he explained.
It’s important for producers to keep that gap tight, but Botterill says it will likely widen again in a few months.
