Peak Oil Demand = World Economies Can't Afford Oil Above US $70
World Economies Can't Afford Oil above US $70
We've reached PEAK OIL-DEMAND, even while finding more and more excess oil supply.
Prices (temporarily propped up by Ben Bernanke encouraging speculators) will be FORCED to crash, one way or another. Current too-high prices are killing world economies and killing demand growth, while those current too-high prices have stimulated too-much exploration and too-much production.
Peak-Oil isn't a problem.
Peak Oil-Demand is the real problem for oil.
We're heading down to $70 (and lower) one way or another, as Ben Bernanke's attempts to prop-up the economy, fail sooner or later.
Don't forget that current producers like the mega-giant BP can produce oil for $13.91 per barrel, so prices have a VERY long way to fall before production is curtailed
Apart from the fact that they've been affording it for, what?, 4 years or more now, the truth of any silly generalization like "World Economies Can't Afford Oil above US $xx" is that some can, some can't.
And so the ones that can, get the oil and the ones that can't see demand destruction.
And whether they can afford it or not, does not mean it will be produced any cheaper. Here's a hint: if something costs $80 to produce, but you can only afford $50, it doesn't mean the price comes down to $50.
It simply means that your bid was too low and you don't get it. Either people that can afford it will get it and you'll miss out, or producers will simply stop producing the items if nobody can afford them for their costs.
And, no, you completely misunderstood what BP said. They never said they can produce oil for $13, but if believing in fairies makes you feel good, go right ahead. The truth is that production costs for the oil industry are increasing at a rate of ~9% per year.