Jeremy Grantham's Quarterly Letter including commentary on the price of oil

Jeremy Grantham's Quarterly Letter including commentary on the price of oil. The Saudis are expecting that these low prices will turn off U.S. fracking, and I'm sure they are right. Almost no new drilling programs will be initiated at current prices and in three years over 80% of all production from current wells will be gone! Thus, in a few months (six to nine?) I believe oil supply is likely to drop to a new equilibrium ($30 to $50 per barrel range). For the following few years, U.S. fracking costs will determine the global oil balance. At each level, as prices rise more, fracking production will gear up. Fracking is unique in oil industry history in the speed with which it can turn on and off. In 5-8 years, U.S. fracking production will start to peak out and the full cost of an incremental barrel of traditional oil will become, once again, the main input into price. This is believed to be about $80 today and rising. In 5-8 years it is likely to be $100-$150 in my opinion. (VIEW LINK)