[evilgenius]

There are many trends emerging now. I'll poll you on a few of them and you can suggest others.

[evilgenius]

I put in war as a final choice but it didn't take. I guess you can only add so many choices to a poll.

[MrBill]

Of course, some of those choices being not necessarily mutually exclusive.

[Smudger]

I think it will plateau again next year but this will be the real signal that production is peaking. The oil price will hit $110-125.

[wisconsin_cur]

So not only are we predicting what will happen, which as Mr. Bill observes our options are not mutually exclusive, but which manifestation will "dominate" 2008 (measured, perhaps, by the number of pages dedicated to the theme on peakoil.com?).

What we remember most from the oils shocks of the 1970's would seem to be the gas shortages, followed closely by the interest rates. These hit people where they live, pun intended, and so, ultimately, they do not care why, so long as it goes away.

I voted for the shortages. It may or may not happen, depending primarily upon the possibility of demand destruction rather than the odds of new supply.

The effects of that are pluriform. I look forward to see how it will change the debate in the American political scene. I do not expect the truth but scapegoating. The battle to blame W's mismanagement by the dems versus scare tactics by the republican (remember Carter's gas lines?) i would expect the dem argument to carry the day.

If, by some chance, nominations actually have to wait for the convention than it could get really interesting... we might even see the truth come out by some candidate though I would be surprised.

I am treating the first nine months as my last chance to get ready in "normal" time.

[MrBill]

$this->bbcode_second_pass_quote('evilgenius', 'T')here are many trends emerging now. I'll poll you on a few of them and you can suggest others.

[DomusAlbion]

My wife, who is a bit of a psychic, said this morning completely out of the blue:

"Oil will be selling for from $158 to $163 per barrel by June 17th. 2008"

We'll see.

[Heineken]

Very confusing survey. As Bill noted, the response options overlap too heavily.

[timbo]

Interesting how evenly distributed the responses are.

[Andrew_S]

$this->bbcode_second_pass_quote('timbo', 'I')nteresting how evenly distributed the responses are.

[RedStateGreen]

I think we're going to decline no matter how hard those oil wells pump. We've already peaked.

[Twilight]

Trouble is, all of those possibilities look plausible and are not really that far apart from each other. You could get a MOL crunch, but a plunge straight into recession could destroy the necessary demand. You could get a production platueau or decline, depending on producers' ability or possibly more to do with the onset of a recession if one begins soon enough. The dollar, it could shoot up as easily as it went down if some of the European financial institutions that bought toilet paper start imploding.

I think what's more telling is the nature of these possibilities and their plausibility. No-one can say it's impossible.

[kadoomsoon]

The europeans are paying for our inflation as long as they buy oil in US dollars..

[evilgenius]

In the interest of full disclosure, I had to vote for something in order to see the poll results myself. I voted for financial collaspe that brings demand destruction. Really, to be fair, you have to subtract a vote from that choice because it isn't either appropiate or scientific for me to influence the results. I looked after there were about twenty five votes. It was pretty much all even then.

[MrBill]

I predict hangovers and tired people on January 1st. After that I am not sure?

[Doly]

My boss is away again, which means I can post with impunity. For whatever they're worth, my opinions on the different options:

1) Actual gas shortages will create lines at stations and set off a marginal cash flow shrinkage that will cripple the economy.

Hmmm... That's probably in store for the future, but I wouldn't expect it to happen as soon as next year.

2) Financial market collapse will shrink the economy and usher in demand destruction regarding oil.

I think that's a virtual certainty. The question is: will the demand destruction be enough to compensate for the decline in production?

It's very hard to tell, but my bet right now would be that it won't be enough. I expect oil prices to average about $100 during next year, with some ups and downs (possibly wild ones). This assumes that the financial crisis takes a bit longer to make some real damage in China.

The next most likely scenario, in my opinion, is that the world finance goes through a serious meltdown, enough to create the kind of unemployment that would cause some very visible demand destruction in the West (there go all those commuters...) In that case, oil prices will be the least of your worries. Hanging on to your house and your income will be your first priority.

3) Despite operating at full capacity world oil output will decline, not plateau, as measured on a daily basis.

I think that's likely. The figures in The Oil Drum suggest so quite plainly. And I find it difficult to think that demand will drop under decline.

4) A plethora of new projects all over the world will keep production steady resulting in a sustained plateauing of production.

That's pretty much believing that technology can do miracles, and that they wait until enough people is screaming for a miracle to perform one. According to Simmons, they're very much already doing as much they can.

5) The decline in the dollar will turn out to be unimportant because petro-dollars will be reinvested and the economy will suck up upwards of $5 a gallon at the pump.

I seriously doubt that the decline in the dollar is unimportant. When the world's reserve currency stops being the reserve currency, expect more than a few financial tremors.

If the American economy was strong, it could deal with $5 a gallon easily. The truth is, it is anything but. If petrol prices go up that far (possible), imagine what that will do to all the people trying to pay subprime mortgages that haven't already defaulted. Then, imagine what that will do to the rest of the American economy.

[cube]

$this->bbcode_second_pass_quote('MrBill', '.')..and especially the rise of resource nationalism that is making investment and increases (or decreases) in production far less transparent.
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