If today’s price of $60 per barrel of oil seems too good to be true, that’s because it is. Oil prices will rebound to $100 a barrel once the economy recovers, and climb toward $200 by 2030, the market’s most comprehensive review predicts. Output is declining at a steep natural rate of 9% while demand grows nearly unabated, the Financial Times explains.
Companies will have to start pumping a Saudi Arabia’s worth of oil—7 million barrels a day—by 2010 to avoid a crunch, requiring an annual development investment of $350 billion until 2030. But even that hefty price tag is only a temporary fix to the inevitably depleting older oil fields. “The era of cheap oil is over,” the International Energy Agency warns.