Quotes from The Drum
ignorance to the next oil shock Currently the oil price is around US$70 a barrel - in the midst of the deepest post-war recession on record. Just four years ago today's "depressed" price would have been a record high.
Robert Hirsch is an energy consultant to the US Department of Energy. His studies of the link between past oil shocks and global GDP suggests there is roughly a one to one ratio - ie, for every 1 per cent decline in global oil production, there is a commensurate 1 per cent fall in global GDP.
Where do we think oil will be trading when economic recovery and oil demand returns? The price may be volatile but the trend will be ever upwards. Have we learnt the lesson that global Gross Domestic Product is inextricably linked to cheap and abundant oil? As prices rise, global GDP falls.
If Jeff Rubin and the IEA are correct, we are moving into a relentless cycle of economic shocks triggered by oil restraint and ever-increasing oil prices.
What are the implications a return to triple-digit oil prices?
...do we continue the current myopic "business as usual - cheap oil forever" scenario?
Will it take oil prices reaching US$150 or US$200... I wish it were not so, but I fear the ostrich-like denial will continue through several more price shocks and recessions.