A book was just released that is sure to be the talk of energy executives, investors, and academics around the globe. It is named by the no-hype title, The Price of Oil, where experts Roberto Aguilera and Marian Radetzki argue quite persuasively that the world is likely to see low oil prices for decades to come.
For those betting on oil to quickly return to $100 or more, this is certainly bad news.
Before you think this book is merely an extrapolation of the current trend of lower prices, you should know that their forecasts were based on a multi-year analysis as oil was still trading around 0.
In an eye-opening interview with Financial Sense Newshour, Roberto Aguilera explained that the twin technological revolutions of fracking and horizontal drilling, which allowed for a massive explosion in US oil production (see chart above), will inevitably expand to the rest of the world. Given that the US only sits on a small fraction of total shale reserves, ample supplies will be unlocked in countries like Russia, China, Australia, and elsewhere, which in some cases hold much larger deposits.
What's more? Roberto points out that fracking and horizontal drilling do not just unlock millions of previously inaccessible barrels of oil from shale, but from conventional oil deposits as well—something that many people still don't realize.
Putting all the above together and the authors conclude that we are just in the beginning stages of a well-supplied oil market for decades to come.