Re:Oil Falls Below $40 for First Time Since 2009 as Glut Grows
by api on Friday August 21, 2015 @04:42PM
(#10100094)
It's more a misunderstanding of economics.
Conventional "stick a tube in the ground" oil may well have peaked or may peak soon, but there's more oil around than that.
It's also not entirely clear that peak oil would mean "oil prices will always go up." If anything, it could lead to successive rounds of demand destruction. I think the most likely scenario would be a "sawtooth wave" price on the way down the peak as rising costs lead to substitution (gas, EVs) and demand destruction (recessions, people moving closer to where they work) which in turn causes price declines. The ultimate demand destruction would be large-scale investment in public transit, which has to some extent been spurred by crazy gas prices.
Conventional "stick a tube in the ground" oil may well have peaked or may peak soon, but there's more oil around than that.
It's also not entirely clear that peak oil would mean "oil prices will always go up." If anything, it could lead to successive rounds of demand destruction. I think the most likely scenario would be a "sawtooth wave" price on the way down the peak as rising costs lead to substitution (gas, EVs) and demand destruction (recessions, people moving closer to where they work) which in turn causes price declines. The ultimate demand destruction would be large-scale investment in public transit, which has to some extent been spurred by crazy gas prices.