Crude oil prices have been in the upper $50s to low $60s since it became clear that the international oil cartel OPEC would extend its production cuts.
Adam Karson, senior economist at Chevron, expects the current price environment to continue through next year.
“I like to frame it as a soft floor, soft ceiling for prices right now,” he said during his keynote speech on the 2018 energy outlook at an event by the Greater Houston Partnership Friday.
Karson said while the OPEC cuts push oil prices up, increased production in the U.S. is keeping them from rising much more.
But while the economic foundations are good, Karson said the risks are political.
“I would argue politics is the new economics,” he said. “The thing I’m most worried about probably, from a global macro perspective, is the discussion about de-globalization and kind of anti-trade. This is key to not only the Houston economy but the U.S. and global economy.”
Other concerns for 2018 include China’s economic reforms, Venezuela’s debt crisis or how Britain’s exit from the European Union plays out.
Regardless, the Greater Houston Partnership expects hiring in the energy industry to be flat in 2018.
