With the day of the OPEC meeting approaching there appears to be a growing consensus among industry insiders that OPEC will be able to regain some degree of control over oil prices. Many experts now believe that the planned production cuts will be sufficient to consume the surplus and in 2018 the oil market will reach an equilibrium at somewhat higher commodity prices. This analysis often has an optimistic sounding ending. Oil prices ending up at levels everyone can live with and US shale picks up the growth in demand from the market.

Unfortunately, life has a way of being messier than that and there is a distinct possibility that the market will face a shortage in the all too near future. Low prices in the oil market and the buzz around renewable energy are inadvertently hiding an unavoidable fact. Namely, the world will almost certainly remain dependent upon oil as a primary fuel source for decades to come. This demand will almost certainly grow and it is quite possible that a growing global middle class will in relatively short order demand more oil and gas than producers are able to supply at these prices.

Globalization is bringing with it a host of benefits for a significant proportion of the population of the planet and with these benefits come a flood of energy demands. The low oil prices of the last few years have resulted in decidedly lower investment in sites and technology dedicated to finding new sites and methods for finding and producing oil. Some experts expect, the demand for oil will rise faster than is commonly anticipated in the next few years. In that case, other than the projected growth in oil production from US shale, the market is largely unprepared to meet these demands.

If that scenario plays out the oil markets will need several years to catch up with the development needed to meet these demands. The period during which this takes place will see a punishing rise in oil prices which have people yearning for the days of a glut in the oil supply.