The days of lofty oil prices are numbered and the price of Brent Crude oil is set to fall 30 percent to $80 per barrel by the end of the year, according to Robert Levitt, CEO and founder of U.S. wealth manager Levitt Capital Management.
Levitt says that increased supply of U.S. shale oil combined with the resolution of transportation issues should ease upward pressure on oil prices.
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A study by PricewaterhouseCoopers (PwC) released on Friday meanwhile predicted that the global boom in shale oil production will shave up to 40 percent off oil prices by 2035 and boost global gross domestic product by 3.7 percent over the same period.
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.
According to Levitt, the impact of increased shale oil supply has been drastically underestimated by markets.
"Oil prices are coming down and we could see them as low as $80 by the end of the year. This will not be because of an economic collapse like we saw in 2008, but because there is so much shale oil coming out of the U.S. and this phenomenon is not well understood," he told CNBC's Asia's "Squawk Box" on Thursday.
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"We are going to see 300,000 barrels a day going from the North Sea to South Korea in 2013, and this is bearing in mind we didn't see any barrels prior 2011," added Levitt.
Between 2004 and 2011, the U.S. shale oil market grew at a rate of 26 percent per year, according to PwC. Growth is now expected to slow slightly, but the study estimated global production of shale oil will still contribute 14 million barrels per day towards global oil supply by 2035, roughly 12 percent of today's total global supply.
Another factor which will contribute to the reduction in the oil price will be the resolution of transportation issues, which will reduce U.S. imports of oil by the end of the year, said Levitt.
Increased U.S. oil production has put pressure on pipelines, which lack sufficient capacity to move the excess oil around. As a result refineries on the East Coast and California have had to continue to import oil from other countries.
Levitt said the U.S. infrastructure network is improving, helping to alleviate transportation concerns in the oil sector.
"Once we have all these issues straightened out. The price of oil is going to come down and that will be a great boom for the global economy," said Levitt.
Lower Oil, Surely Not?
Levitt's view, however, goes against the grain of broader opinion in the sector. Most analysts expect oil to remain at, or close to, current levels by the end of 2013.
Brent crude oil traded at its highest level since May last year at $118 per barrel on Friday. Analysts attribute the strength in oil prices to an improvement in the world's two biggest economies, the U.S. and China.
Han Pin Hsi, global head of commodities research at Standard Chartered bank, said oil should be trading at $100 per barrel today based purely on supply-demand fundamentals, but said the global oil market is "not just about the U.S."
"U.S. shale oil production is much higher than two years ago and will continue to grow. But another important factor is production levels in Saudi Arabia, which hit a 14-month low last month, and Saudi Arabia does not necessarily have the incentive to increase production," he said, referring to the world's biggest oil producer.
"We would have to see a low probability event, such as a significant reduction of the tensions in the Middle East, or a slower recovery in global growth than expected to really bring the price of oil down below $100 or towards $80. The lack of strong economic growth has widely been priced in already," added Hsi .
He expects Brent crude oil prices to average $111 per barrel this year.
Other analysts argue strong demand from China should keep pressure on oil prices to rise despite increased shale oil production.
"We are seeing increased flows out of North America but Chinese oil demand remains robust at around 5-6 percent," said Neil Beveridge, senior oil analyst at sell-side research firm Sanford C. Bernstein, whose forecast for the average price of Brent Crude for 2013 is $110 per barrel.