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"Its a bit strange that right now both our oil supply and monetary system are susceptible to a single calamity."
The idea that a massive credit cycle peak and Peak Oil could occur at roughly the same time is very scary. The credit cycle, no problem, we can get over it with a depression or recession, but could PO have come at a worse time?
Given the mood of the people, the denial is likely to last longer and the chances of a serious response to the problem are diminished.
You say a 2008 peak, but the chart of global liquid is not showing any upside momentum. I think we are at peak oil now. A strong month next month could change my mind, but as it looks at this moment, I think we passed it. Any significant leg down and price will react to the upside. Odds are we get a Carribean hurricaine or a cold winter that has an effect.
Just note I'm not saying a 2008 peak but it takes years after peak before the effects of decline begin to be felt. If we peaked in 2005 then 2008 is the first year when what I call post peak forces are really beginning to have effect. Once we have insufficient oil for potential demand then the condition is in place even less oil does not change the dynamics.
I think the critical factor is how much demand destruction is caused by a faltering global economy. I happen to think it will not be that much or more important lack of investment in the oil industry will drop oil supply faster than economic induced demand destruction. So if you include this effect I think that lower prices from demand destruction wont happen.
So you can see how in 2008 the factors the will influence oil prices for the next several years will be in place.
Right now we still are in effect living off our credit cards from the financial bubble so we won't know how a reasonable economy will respond until later in 2008.