Kemp: Forecasts For Higher Oil Prices Misjudge The Shale Boom
The price is currently close to the top of its historical range, while in the 1990s and early 2000s it was near the bottom.
So oil prices could retreat from their current highs by $20, $30 or even $40 per barrel and still remain quite high in historical terms.
By comparing current exceptionally high prices with the very low ones that prevailed "a decade ago", Hamilton risks using a misleading baseline.
North American shale is currently the marginal source of supply in the world oil market, and most producers claim they can break even at $70 or even $60 per barrel.
Prices have varied enormously over the 155-year history of the oil industry, mostly in response to large discoveries and changes in technology.
The collapse in oil prices during the late 1920s and 1930s was largely due to the discovery and development of massive new fields in East Texas.
Low prices from the 1940s through the 1960s owed much to the massive discoveries in the Middle East around the Persian Gulf and in North Africa.
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