Small, independent producers can churn out shale for $40 — or less — a barrel, he added.

"It looked like the world was making progress toward rebalancing, but (these) two things have really pushed out rebalancing," added Yergin to CNBC's Squawk Box.

U.S. shale producers keep making their costs cheaper while Nigeria and Libya — two OPEC countries exempted from the cuts — keep producing more, said Dan Yergin, vice chairman of market research firm IHS Markit.

OPEC wants higher oil prices. But the same things keep getting in the way.

Forget that world of $100 — that was not the new normal; that was an aberration.

"We are seeing that people can operate in the $45 range when people thought it was going to be in the $50s, because people keep figuring out how to push down the cost," said Yergin.

This is as producers learn how to be more efficient in the growing industry. Data analytics and automation also help, he added.

"Forget that world of $100 — that was not the new normal; that was an aberration," Yergin said of prices before 2014, when oil prices crashed. Although they have recovered from their lowest below $30 a barrel last year, prices are still below $50 barrel on Thursday.

Oil futures were slightly higher on Thursday in Asia, with U.S. crude moving around $45.40 per barrel while European Brent was around $48 per barrel.

That oil futures were still holding up well above $40 per barrel is a reflection of distracted investors who were focusing on issues other than production costs, said Yergin.

"It shows you there is so much supply, the focus is on the inventories, the focus is on how U.S. production keeps coming up, so something that in other circumstances would've sent shudders to the oil market doesn't happen," said Yergin.

IHS is forecasting oil prices to average at the lower-end of $50 per barrel for 2017.