including production, transportation, refining, distribution and marketing. In such an environment, demand grows due to “cheap” energy while supply capacity either stagnates or contracts due to lack of investment. Inevitably, prices must rise to restore balance by reducing demand and encouraging additional investment in supply capacity. We are seeing this dynamic played out today. From the mid-1980s to the end of the 1990s, the oil industry operated in an environment of surplus upstream and downstream capacity. Overcapacity all along the supply chain kept prices low, contributing to complacency about the adequacy of existing capacity to meet future requirements. At the same time, low prices boosted demand. --More 1933 Local Time 1633 GMT
