Some savvy commentary from CERA’s Dan Yergin today. He argues that oil supply and demand have becoming increasingly "decoupled" from oil prices, and the result is that we are only mad mullah (or equivalent) from $100 oil.
Peak oil, at work, right? Not necessarily, according to Yergin. Read on:
“Although publics and governments around the world are focused on prices, one of the most important factors in the world oil industry is the rapid rise in costs owing to shortages of people, equipment, and skills,” he told the Georgetown University conference. Citing the IHS/CERA Upstream Capital Cost Index, he said that a new oil project today would be priced at 70 percent more than a project that was launched just three years ago. “The increased costs are leading to delays and postponements of oil and gas projects,” he said, “which is affecting the timing of future supply.”