Two Perspectives on Peak Oil and Future Prices

Here is another bit on Peak Oil, and oil price forecasts. I like both Bill Conerly and James Hamiltion's viewpoints. Conerly views the market as "characterized by cartels and long time lags [from production to market place]". Hamilton makes a case that perhaps "scarcity rents have indeed started to make a contribution to oil prices over the last five years." Both are interesting views.

Just below find Conerly's view from his Businomics blog

James Hamilton has a nice post, quoting David Cohen of The Oil Drum.  He explains the standard economic argument that the price of a finite resource being depleted should rise at a percentage rate equal to the rate of interest.  But, of course, it hasn't.  Then a discussion of why not, and will it soon.

In contrast, my view is that the market is characterized by cartels and long time lags to get new production to market, as well as long time lags in production declines.  As a result, we have oscillating prices.


My eye is drawn to 1986, when the price of oil plummetted.  At some point, I expect oil price to drop significantly.

Hamilton is worth reading, though he doesn't share my forecast, because he both has an opinion, but also has some humility about the forecasting business.  That's rare in the blogosphere.