- Global shakeups that cause dramatic and sustained spikes in oil prices are, for now, unlikely to occur, analyst Rusty Braziel predicts.
- "Prices may spike in the short term, but not the long term. That forward curve still is on the downhill slide," Braziel tells CNBC's Jim Cramer.
- Increased U.S. oil production, among other factors, has created more resiliency in the oil market, Braziel explains.
Global shakeups that cause dramatic and sustained spikes in oil prices are, for now, unlikely to occur, oil expert Rusty Braziel told CNBC's Jim Cramer on Monday.
Braziel's remarks on "Mad Money" come a little more than a week after half of Saudi Arabia's oil production was knocked offline in a drone attack. While oil prices immediately rose, it didn't take long for the price per barrel to retreat from those levels.
"When you look at how much resiliency that there is built into the marketplace, I think most of the market assumes that if prices go up, the U.S. and other countries will respond," said Braziel, president and principal energy markets consultant at RBN Energy.
"It may take a little time, so prices may spike in the short term, but not the long term. That forward curve still is on the downhill slide," he said, referring to futures prices for oil.
Brent crude futures, the international benchmark, opened at $71.95 per barrel after the Sept. 14 attack. On Monday night, it was at $64.41 per barrel.
In addition to the market reaction to the Saudi attack, Braziel pointed to what happened to oil price when political tensions boiled over in Venezuela earlier this year.
"A lot of people that oil was going to go up when Venezuela was going to hit the wall," said Braziel, who has worked in the oil industry for more than 30 years, including a stint as a Texaco executive. "Gee, that didn't exactly happen that way, did it?"
Among the main reasons for the market's increased resiliency is the increase in U.S. oil and natural gas production, Braziel said.
For example, the U.S. produces six million more barrels per day than in 2011, when the U.S. authorized a release from the Strategic Petroleum Reserve after disruptions to Libyan supply, Braziel said.
"That means that we're just insulated from this sort of thing," said Braziel, who described the recent Saudi attack as the largest oil disruption since the Libyan situation.
Braziel also said Saudi Arabia has adapted its pipeline to shift production in ways that makes it more resilient to disruptions. Reuters reported on Monday that Saudi Arabia could restore production by early next week.
Plus, the global economic conditions are acting as a containing force for oil prices, Braziel said.
"Put all that together, and [the price per barrel] was just not going to hang up there the way people thought," Braziel explained.