Why oil prices will never return to $100 a barrel, in one chart
He explained that one of the biggest risks to the oil market is how low-cost producers respond to this abundance. In the current market, these low-cost producers can “ration” their supplies because they don’t have large expenses to immediately cover. That means they may be able to wait a day or month to produce more oil if it fits better into the trading environment.
.. “I would expect the low-cost producers to gradually use their competitive advantage to increase their market share relative to high-cost producers,” he said.
.. “My view on oil has always been that the level of oil prices we saw in the 2011-2014 period around $100-$110 didn’t seem a natural settling point. That in itself was a function of the many issues going on that at the time, particularly significant supply disruptions post the Arab Spring,”