Six months ago world news was full of this stuff. Then the Saudis announced they were ramping up production and pressures eased for other reasons. Well, the Saudis haven't been able to deliver - not even the heavy, sour stuff let alone light, sweet crude. Meanwhile demand has continued to increase so here we are with $71 a barrel oil and no relief in sight.
What's likely to happen? The worst.
First, the failures of major industries highly sensitive to energy prices; airlines, major auto manufacturers, tourism.
Second, failure of secondary industries as disposable income disappears in the face of rising food prices and loss of jobs.
Third, general economic collapse.
Fourth. War.
...This scenario doesn't consider massive climate change (man-made or natural) which seems imminent.
How likely are we to be insulated from the worst of it? I don't know.
You have brought up some excellent economic related points to ponder.
Kuwait: Burgar field, Worlds 2nd largest 1mb, last year was
2.1 mb/day, now 1.7 mb/d and declining.
Mexico: Cantarell, 4th largest, now 2.1 mb/day, by 2008
will be producing 1 mb/day or less.
Saudi: Ghawar, worlds largest, oil minister just
announced last week that output will decline by
8% yearly.
Yes, some wells will be uncapped, but when energy to pump and recover equals energy released, the well will be abandoned.
General economic collapse. I guess I better stock up on canned goods and shot gun shells now. Do you static analysis, doom & gloom guys ever consider the power of market forces and innovation? No, I thought you didn't.