NVDL: If the current economic malaise is bad enough, oil depletion may no longer even be noticed, perhaps never again, as more and more industries collapse not due to lack of energy, but due to - simply - the evaporation of finance.
The great unknown is how much effect a major economic contraction will have on oil consumption. Industrial consumption of oil will drop as economies contract as will discretionary consumption by those who have lost a portion of their former incomes. For other uses such as agriculture, home heating, public safety and utilities, it will be very difficult to make major reductions in consumption in the short run. However, for a world in which oil consumption is deeply engrained in nearly all facets of life, much will be given up before large drops in oil consumption take place.
It appears there are least two possible scenarios that could play out in the months ahead. Either demand holds up to a level at which OPEC can control the situation and we have higher prices, or the Great Recession causes demand for oil to simply melt due to lack of economic activity and declining incomes. |
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