I suspect we are living in fool's paradise with unnaturally low oil prices. SUV sales are steady and air travel is booming. There must be a day coming up soon when it will be obvious we can't keep going at this rate. That day seems likely in the next decade.

A possibility is that due to reduced economic activity that oil prices will stay low even as supply declines. From say 95 million barrels to 85 the 75 then 65 perhaps as early as the year 2030. It's hard to see how nearly a billion internal combustion engines can keep going. That's cars, trucks, tractors, planes and generators. Perhaps cheap oil is a last meal for the condemned.

The only reason oil prices were unnaturally high was market speculators; who created an unnatural oil drought by patent collusion and withholding supply!?

Then held ordinary mums and dads as their financial hostages to be squeezed as hard as the so called "free market" would tolerate!

This price gouging financial blackmail has had its day, thanks to the Saudis and their new refineries!

If I had my druthers this sort of essential commodity speculation would, along with short selling, be made illegal!

If that obliges some inherently immoral people go out and do an honest days work, providing it doesn't kill them , so much the better!

Nicholis seems to want the prices to rise, as does Putin?

Sorry mate, but as long as the still untapped edmonton reserve is there with an estimated 1.8 trillion barrels of crude. I don't fancy your chances; or the longed for easy money/windfall/money for nothing profits?

Thankfully the US, China and other gas rich nations are turning to that as their substitute!

The day of the petrol competing battery is almost done thanks to GM and its Lithium ion beating new battery with doubles the range and recharge to 80% capacity, in the time it takes to take a comfort break.

Perhaps the oil barons can corner that market then virtually blackmail the people for their essential energy requirements?

And only possible due to gutless governments, with anything but the good of the people they allegedly serve in mind?

The cost of essential energy impacts on every facet of life, be it growing or transporting food or pumping the water needed to grow it!

Or as basic as just ensuring that you can use the toilet in the high rise! If essential energy rises much higher in cost, there'll be a lot of very full faces in many of the towers?

Bring on cheaper than coal thorium and cheap as chips endlessly available biogas.

We've had a bellyful of billionaire brokers, artificially created scarcity and captive markets!?
Rhrosty

A characteristic of the oil market is that minor, almost unnoticed changes somewhere in the production change can cause big swings in the price.

No analyst expects oil prices to stay low for very long, but the writer is hopeful in expecting the shale oil industry will decline. While he is correct to say that shale oil wells peak and fade very quickly, I believe the problem is that they keep on drilling more and finding more spots to drill, so no fading.

Saudi Arabia's lack of capacity, again as I understand it, is due to its failure to invest in expanding its facilities.

The volatility in oil prices was predicted by Colin Campbell,
Kenneth Deffreyes and others way back in the 1990s.
The low prices at present are due to a glut caused by the high prices
of the last few years being higher than the economy could pay.
The reduction in demand then forced the prices down to their present level.
I notice the author's article was on Oilprice.com and that same web
site published an article by another, whose name escapes me at the
present, who went into great detail about the finances of the major
oil companies.
All that was at the time that Shell was selling off its interest in
Woodside at the time in a program to raise funds to be able to pay a dividend.
That is a signal that things are not well in the industry.

Further to all that is that the price that the economy can afford
is lower than the breakeven price of the tight shale oil companies.
As someone said; "Goldielocks is dead" !
The tight oil companies are in difficulties at present prices and a
few have already become bankrupt.

How will it affect us ? Who knows, we will pay the TAPIS market price
(about $9 higher than WTI) so long as our "firm commercial arrangements" hold up.

There is a graph I would like to put here if it was possible as it
shows quite clearly that there is a problem.
The main points are that the year of the
highest amount of oil discovery was in 1964.
1983 was the first year that production exceeded discovery.
Discovery rate is now a small fraction of the 1964 figure.
Production is now about 4 to 5 times discovery.

The graph clearly shows that we are entering the terminal phase of oil usage.

It is amazing that Australia unlike the majority of first world countries, does not have a strategic reserve. Our own reserves are down to nothing and even if we did have any oil left the refineries are all finished.
On the front of a lot of trucks is a notice that says "without trucks Australia stops".
It should say "without diesel trucks stop."
All of our fuel now comes from Singapore and has to pass through the Straits in Indonesia. A very easy place to block.
Our gas which could run trucks is being shipped offshore and there is no infrastructure to distribute it here.
Well managed, pollies.

We were supposed to have been running out of oil in the seventies. Almost 5 decades later, we are still be being warned how "fragile" oil supplies are. Crying 'wolf' at regular intervals hasn't seemed to work; just like global warming and cries for very expensive, inefficient renewable energy, which, seemingly, we are supposed to call for every time we get the warnings about oil running out. Scare-mongering and control is the name of the game.