[Northern_Pike]

$this->bbcode_second_pass_quote('vtsnowedin', 'W')e spend a lot of time contemplating conditions here in North America post peak oil but imagine for a minute if you will KSA after the last barrel is pumped. That last barrel will probably sell for $1000 but who will be running the pump and where will it get shipped? Will the country revert to a pile of sand crisscrossed with rusting plumbing? Wonder what their plan to keep the oil wealth is?

[rockdoc123]

I think there are some misconceptions hanging around. $100/bbl oil did not change consumer behavior. You could argue $140/bbl certainly did. A price for oil anywhere from $70- $90 is not going to destroy world economies. The reason everything is in the toilet right now is almost all to do with the credit crisis. One could argue that if the credit crisis had not happened we would still be sitting near $100/bbl. This would especially be true if the hedge funds hadn't been forced into liquidating their oil positions. The flee to the $US dollar as a percieved means of safety (although I understand why this happens I can't help shaking my head as to why anyone would look at the US economy as having any safety in it anywhere) has also had it's impact by pushing oil price lower.

When it is all said and done oil and pretty much every commodity and for that matter equity is more controlled by investor sentiment than it is by demand/supply realities. The business press exacerbates the situation by turning everything into "a sure sign that economic end times are near". Panic currently is rife, no amount of real information regarding the lack of new oil coming on stream, the fact that major projects are being shelved, that small natural gas players are going out of business or being forced to merge has any impact, but if the press announces layoffs of a hundred people at a pillow factory it most certainly will result in a wave of panic selling. Such is the current market mentality. No one actually knows for sure that this is going to be a very bad recession...it is pretty much guess work at this point in time. But if you want to believe it, well it will come true by your own making.

I've said it a number of times recently and in the past as well ..... an artificially low oil price when the world is already consuming higher cost oil and we are not finding new cheap reserves is the absolute worst thing that can happen. If the price drops below $60 for any length of time all of the subsurface heavy oil projects will end up being shelved, offshore Brazil will get shelved, the UK North Sea will go strictly to blow down with no new investment to lengthen field life, Russia developments will tank. Cheap fuel will encourage people to consume more and we will end up in a slingshot effect.....increasing demand with a lot of oil which could have been available now taken off the market. Saudi Arabia saw this coming I think....this is why they have ploughed forward with developing their spare capacity irrespective of oil price. In a slingshot demand/price scenario they are set to increase their market share considerably.

[Plantagenet]

$this->bbcode_second_pass_quote('Northern_Pike', '')$this->bbcode_second_pass_quote('vtsnowedin', 'W')e spend a lot of time contemplating conditions here in North America post peak oil but imagine for a minute if you will KSA after the last barrel is pumped. That last barrel will probably sell for $1000 but who will be running the pump and where will it get shipped? Will the country revert to a pile of sand crisscrossed with rusting plumbing? Wonder what their plan to keep the oil wealth is?