Low Oil Prices Are Here to Stay as US Shale Oil Revolution Goes Global

Oil price rises over the past 40 years have been truly spectacular, but the recent fall is probably here to stay, thanks to increasing production.

View of an Argentine oil company YPF's pumpjack to extract oil from a well at Loma La Lata, near Vaca Muerta shale oil reservoir, in the Patagonian Province of Neuquen, some 1180 km southwest of Buenos Aires, Argentina, on Dec. 4, 2014. YPF has an agreement with U.S. Chevron to exploit Vaca Muerta, the world's second largest reserve of shale gas and fourth largest reserve of oil, estimated to contain the equivalent of 27 billion barrels. Juan Mabromata/AFP/Getty Images

Oil price rises over the past 40 years have been truly spectacular, but the recent fall is probably here to stay, thanks to increasing production. We discuss these trends in our new book, “The Price of Oil,” published this month.

In constant money, prices rose by almost 900 percent between 1970–1972 and 2011–2013. This can be compared with a 68 percent real increase for a metals and minerals price index, comprising a commodity group that, like oil, is exhaustible.

Oil has increased in price unlike any other commodity. Author provided