Jared Diamond on Collapsing Civilizations

From what do you make that [oil getting cheaper] conclusion?
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Looking for data, it appears as if I am wrong or at least not definitely correct.

Because oil is subject to price spikes, it is difficult to find a trend. The following link could be taken as showing a downward trend with spikes or it could be taken as showing a rising trend. Please note that the price is back down to around 40 not at the 56 shown on the graph.
http://www.fintrend.com/ftf/images/charts/Oil_inflation_LG.htm

I believe that oil has a natural price of less than $15. When there is a crisis in the middle east, it spikes. I realize that you could also say that oil has a natural price of $40 and that when things calm in the middle it drops. I would bet that in 10 years, oil will be back under $15 inflation adjusted.

CBL
 
Natural price?
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I probably used a bad phrase. What I meant was the price, if we assume the typical problems in the middle east and other oil exporting nations. I think that the price would be under $15 because technology improves as fast (probably faster) than supply decreases. If I were more optimistic about the middle east, I would predict a lower price.

CBL
 
Originally posted by AWPrime
You did take into account the increase of demand?
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I think demand for oil is much more elastic than most people imagine. There are lots of substitutes for oil but they are not currently economically competitive with our current technology even a $50/barrel.

BTW, I was throwing in oil as an example of products which have substitutes. Since my original goal was to show why all natural resources were getting cheaper, it was a poor choice. It is the only one that I can think of that could be used as a counter example. I believe this is a temporary aberation but I cannot prove that - yet.

CBL
 
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