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71 comments on The 2008 IEA WEO - Oil Reserves and Resources
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71 comments on The 2008 IEA WEO - Oil Reserves and Resources
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This $50 oil crock will guarantee a massive spike in the near future. We can have a surge of consumption even if the world is in a recession, if oil is cheap enough. The worries about demand in the market are insane, there will never be a shortage of demand but there will be a shortage of oil.
The Youtube video at http://www.youtube.com/watch?v=T7vGDwGLU7s gives a very excellent, visual explanation for what is happening to the oil prices now. Many have predicted it, and we are seeing it play out. Oil prices spike, causing a recession, which kills demand, lowering oil prices enough for a recovery, which causes demand to rise again and spike prices back up again.
Of course, there is more to this recession than oil (unsustainable amounts of debt), but I think the oil price spike caused this recession to start a few years earlier than it otherwise would have. Right now the primary blowback is the unsustainable credit bubble collapsing, amplifying the effect that high oil prices otherwise would have had. The above video is still instructive.
This is also the "ratcheting down" effect James Kunstler described in his book, "the Long Emergency." Good book.
Phil, your post is excellent and this data really allows us all to develop some insight into "what happens next".
I wonder how much of the oil price decline since the IEA released their report (Nov 12) is due to their own (unrealistic) optimism about future supplies and their (wishful) opinions about the dire impact of the global recession on oil demand?