I think oil prices will come down...

I'm not so sure. The collapse of the real estate market will certainly slow the US economy, but that doesn't necessarily translate into lower gas prices for everyone. With the economic rise of many other nations, the US is less of a global influence than it used to be. It's really the overall demand that's in question, not just the demand in the US.

 

An alternative scenario...
As the US dollar continues to fall there is also increased pressure to de-couple international oil prices from the USD and switch to something more stable (e.g., the Euro). If and when that happens the international price of oil will not climb as rapidly as before, but the price to the US consumer will climb even more rapidly.

 

predictions of $4 gas in mid Feb seems not likely. as gas prices did jump 15 cents for a few days but have gone back down and are nearing the low 3's.

its the housing and jobs market that will be where the pain is.

 

I think your sarcasm is showing...

My sense is that growth is increasingly preventing prosperity...

 

Most significant is the primarily negative influence of humanity on ecosystems, because of our disinclination to deal comprehensively with global warming now. Our grandchildren will surely suffer as a consequence of our inaction. Will our generation’s legacy be short-sightedness?

We should be raising the price of gasoline and motivating the auto companies so the CAFE is raised more quickly. Our President just asked the Saudi king to pump more oil, so the US economy won't slide into a recession! His priorities are wrong.

WAKE UP, before it's too late!

 

I hear ya, John, but I'm becoming more philosophical about it. We're learning, even if it is the hard way. Metaphorically, the alarm bells have been wailing all my life, beginning with Rachel Carson's Silent Spring, but most people still claim not to hear them.

 

Besides many non-oil employed geologists, even the geologic experts from within the oily community say peak oil is here, now. It's sure be nice to see the basis of your conclusary "decades away" statement.

 

I don't think that the real estate decline by itself is going to have a big impact on our energy consumption. Things like heating and cooling are for the most part fixed, as they are dependent on weather more than anything else. (If anything, lower property values will mean more consumption over the long-haul since folks aren't going to feel like spending money upgrading their HVAC systems while their property values are in the toilet.) People aren't going to get up and move closer to work, either, since that would mean selling the house. (First-time buyers would be excluded since this is a pretty decent time to get into the market.) The cars we've been buying for the last ten years are generally yachts, and trading to something more efficient usually means spending out of pocket. Recreational travel will decline, I suppose. Maybe we'll make a better effort to combine trips and what not? But without digging for numbers, that kind of improvement seems pretty fringe to me. Overall there's nothing going on that would decrease our consumption and, in turn, depress the cost of energy.

So, I think prices are going to stay at levels and perhaps push a bit higher. I'm not betting on $4.00 nationwide pump prices, either, but it's going to take a lot more than this to push it back down. Maybe after a few years of really tough times? And hopefully we won't find out?

 

It doesn't matter.

The price of gasoline will still stay about where it is now and will slowly creep up in a roller coaster manner. They're shooting for $5.00 a gallon.

A Federal commission has recommended an increase in gas taxes across the nation. (No surprise Texas Gov. Perry is opposed to it.) Some states more than others. It's for infrastructure and repait. But I've heard that song and dance before. No matter how many taxes, bond measures or whatnot is applied, the roads never seem to get fixed. At least in So. Cal we're lucky not to have the snow and ice eat away at them.

Fed. Commission recommends increase in gas tax

 

I think best case scenario is an extended plateua, as opposed to a peak.
But no one is mentioned the two facts that get overlooked.

1) Even if (big if) worldwide production (Read: oil extracted) doesn't trend down, the usage of oil to get and process that production is ever increasing (sour oil, heavy crude, deep water, etc.). So the actual useable amount of oil will be decreasing anywyas.

2) Every oil exporting country is growing and becoming more industrialized, which increases their own internal usage. Hence, given a static amount of "production" the actual amount of exports will continue to drop as they use more internally.

 

That's right. Some of the Saudi fields have been on line for nearly SEVENTY years. And guess what it takes to pressure pump tons of sea water into the ground, so that you can then pump the crude out of the ground? Tons of energy. And that ever increasing energy cost gets factored back into the stuff comming out of the ground. And once the giant fields get to a certain point (not too far below the 1/2 way point) the cost of the energy you use to get the crude out increases so much, it's no longer economical to get it out of the ground. That's why so many wells here in the U.S.A remain closed ... even since the 70's.

 

To follow on the heels of Hill and JHinton... you can actually damage a field by trying to force the production rate too high. The Mexicans appear to have done this with their Cantarell field. By injecting nitrogen into the field they were able to turn Cantarell into the world's second highest producing oil field for a few year (2.0 million barrels/day). However, in 2006 the production rates started dropping precipitously and that trend is continuing as far as I know.

 

I disagree with the analysis of the OP. I think oil prices will continue to rise as production falls and demand continues to increase, with growing population and emerging market growth more than compensating for the decline in the U.S. economy.

However it's all speculation. None of us can know the future.