There is a lot of oil above-ground.
From FT Alphaville:
Oil production costs in Goldman’s “flatter” world
Goldman’s analysts, long-time oil bulls, are now expecting a “flatter oil price environment” in the next few years. In other words, they think prices in 2013 and 2014 will be “marginally” lower than current spot levels, and drift down to $85 by 2016.
Clearly not good news for the oil majors who have watched their own costs spike higher over recent years (our emphasis)...MORE