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Old 02-12-2016, 12:52 PM   #18 (permalink)
solarguy
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I think the more sophisticated macroeconomic analysis of peak oil suggests that around the peak, or just after the peak in production, prices will get very volatile.

Volatile doesn't just mean higher and faster, it means sudden jumps up AND down as the market goes all herky jerky on both sides of the supply/demand equation.

I am personally a soft landing peak oil person. Alternatives and conservation smooth out the bumps and we transition to a lot more renewables in a fairly peaceful process.

So, two years from now, don't come crying to me and be all surprised when fuel prices shoot up again.

I think there is also some international politics and economic sabotage going on. The Saudies could see that with russian production heading to all time highs, and non-conventional (shale) oil production in the US and Canada rising to all time highs, it was going to hurt their bottom line. They also could not control russia and north america.

So they let the prices drift high enough that russia and the US invest a bunch of money in producing oil that makes no economic sense unless the price is over $65 or $70 a barrel.

Once all those companies are commited, the Saudies flood the market and laugh as the russians and americans cry while they lose piles of money and see their economy crash.

That will lead to a much slower build up of non-conventional oil production the next go-round. And Saudi laughs all the way to the bank.
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