ABSTRACT
Even a low projection of long term growth of world demand suggests that the world cannot rely on oil and natural gas to sustain growth because of depleting reserves.
Distribution of oil and natural gas in the world is uneven. At the margins price may be related to the cost of extraction, but the role of the OPEC member states in fixing oil prices is a consequence of political and commercial power associated with possession of the world's major oil reserves in an expanding market. In that situation, the price of oil has become, and can be expected to remain, unrelated to the cost of extraction.
