Oh no..not another one.

Uh, dude, cutting off subsidies in importing countries will not increase exports. If the price in China rises to world rates, they will buy less, lowering their imports. Evey barrel that isn't imported is a barrel that isn't exported.

I buy a meet in the middle thing where prices and imports (which by definition equal exports) both go down, but that is not what you said.

It's this whole math thing. Not a strong point of East Texas or anywhere else in Dixie.Jesusland

The question is about likelihood not remote possibility.

Your first and third reasons are essentially tied together and based on the fantasy that the US (and OECD) would like for oil producers to make decisions in the best interests of the consumers. Personally IF I were an oil producer who could see the end in sight I would be increasing subsidies in an attempt to build a stronger non-oil export dependent economy as soon as possible in the hopes that someday I would still have an economy. I would hope that companies from around the world relocate to my country to strengthen my economy. I wouldn't see why the people of my country that are gracious enough to export their oil should have to pay global market price when they have the opportunity of obtaining what the US did through exploiting Texas (et al). They need the money too but probably one reason they do export is threat of military force by the US. Hence, basing your hopes on elimination of subsidies is at best fantasy. Reason #3 reduces to #1 because you say overall consumption reduction but if subsidized consumption remains or grows then the balance of consumption is only import consumption and that seems pretty unlikely to reduce exports. It may reduce price pressure but I see little hope that it would soon cause export reduction.

Reason #2 is silly. Any remaining growth in production now is meagre as a percentage. Yes, if production rises faster than consumption then blah blah, ya. See my first point about the question being about likelihood not remote possibility.

Second, production globally IS rising whether you like it or not!

I am not sure why you feel the need to pretend you are conversing with people who somehow desire oil production to fall. Since falling oil production would most likely lead to a collapse in civilization it makes no sense to assume that anyone outside of a small group of elites (ie Bilderbergers, Illuminati, etc) would want oil production to fall. So the question is .... who do you think you're talking to?

But the real question is not whether oil production is rising, but whether or not it is rising fast enough to sustain the global economy. The growth rate in oil production over the past 5 years is only about 0.4% annually, even despite the huge price increases. That is only 1/4 of the rate required.

I believe Matt Simmons said that one can not positively identify the peak until 5 years after it.

And I don't believe Matt Simmons ever made such a statement. He did say something to the effect that the peak may not be detected until it is in the rear view mirror but I don't think he ever said anything about five years.

We have been on an undulating plateau for three years and non-OPEC has been on a plateau for four and one half years. However non-OPEC production is down in 2008 about half a million barrels per day from its February 2007 peak. And if the IEA is correct, April non-OPEC will be down about one mb/d from that. And the IEA has world production recovering 490 kb/d in May but 395 kb/d of that comes from OPEC. That means non-OPEC remains down. http://omrpublic.iea.org/

The rise however comes after extensive downward revisions to 1Q08 non-OPEC production and lower biofuels and NGLs for the rest of this year.

Ever the optimist they predict non-OPEC production will recover later in the year. I am predicting it will not. Non-OPEC production fell off that over four plateau in April 2008 and it's all downhill from here.

Ron Patterson

See this is where I can not agree with the general prognosis of future global oil production. I sit here, day after day, listening to WT and others talk about how there is no major oil fields left to be found. That all the biggest and most promising basins have been found, and that we have effectively found and used half of the oil that we will ever use yesterday.

Then there are people, perhaps yourself, that agree with this assessment, yet throw out ridiculous statements such as 'I am not sure which will dominate [decline or higher prices for increased recovery].' Do you not know? Did you not follow one line of thought to its relentless conclusion? If we ARE on the downward spiral, NO price point will lead to an increase in oil production. The 'law of receding horizons' is RELENTLESS in this regard, and ensure that only the decline rate can be influenced.

No, I prescribe to an entirely different outlook on where the world will be headed.

* There will be an elimination of fuel subsidies, starting FIRST with the countries that import the most oil, and last with the countries that export the most oil. We are already seeing this in the US ($1 to $4 gallon gas) and in some Asian countries (an end to fuel subsidies).

* There will be a push for increased biofuel production at great cost a number of less fortunate human beings. Again, already taking place.

* Poor ERoEI will eventually necessitate a shift from ICE powered transportation towards PHEVs. What are the major automotive companies ALREADY working on?

* Eventually, the price point will be so high and goods so expensive that governments will have to intervene and start a massive push towards mass transit. Europe is ahead of the game, and the US Congress recently approved more Amtrak funding. Additionally, several billionaires such as Warren Buffet are investing heavily in Rail.

* As consumption crashes but the world itself does not, the wealthy elite will start driving purely Electric Powered vehicles. Tesla Roadster anyone?

* A collapse in oil price will lead to a collapse in the prices of other commodities. Its a whole new ballgame at this point, assuming we haven't blown ourselves up! Unfortunately, I would imagine a large portion of the human population will be living in poverty or have died due to starvation at this point.

Is that an end of the world scenario? Hardly. The only question is how fast the economy will react to the price points and how hard the fall will be. Doomerbate to the untold horrors all you want. Nothing is preventing us from muddling through this issue over the next 30-40 years while demographics take care of the global population issue. I'm not losing much sleep over this issue as things seem to be unfolding rather nicely.