Dan Yergin, energy expert and vice chairman of IHS, said Tuesday that despite optimism helping to support global oil prices, any upset in the fragile balance within oil market supply and demand could cause prices to tank again.
Speaking to CNBC at the World Economic Forum (WEF) in Davos, Switzerland, Yergin said there was “optimism literally embedded in the snow.”
“This is the most optimistic, from an economic point of view, that we’ve seen in 10 or 12 years, and it reflects the strength of the world economy,” he said.
Such optimism was, he added, “one of the key factors that’s taken oil prices to the level they’re at now.”
Oil prices arecurrently near three-year highs, bolstered by optimistic growth forecastsfrom the International Monetary Fund and supply cuts by OPEC and non-OPEC producers, including Russia.
Yergin said that oil prices were also being driven by optimism in financial markets and some geopolitical risk — and the prospect that some oil production could be taken out of the market.
“Things can turn around on that and any shock to the global economy would do that (dent prices),” he said.
