High oil prices are good for oil exporters while low oil prices are good for oil importers, Tverberg writes. The result is a price tug of war between oil importers and oil exporters.
Oil demand has to do with how much oil we can afford, Tverberg writes, and many of the developed nations are not able to outbid the developing nations when it comes to the world’s limited oil supply.
Financial collapse is related to high oil prices, Tverberg writes, and also to higher costs for other resources as we approach their limits.
Globalization uses up finite resources like oil and coal more quickly, Tverberg writes. It also increases carbon dioxide emissions and acts to increase world oil prices, she adds.
Wages don’t rise at the same time as oil prices rise, Tverberg writes. The result is a mismatch between what citizens can afford, and the cost to manufacture and transport products.
If we want to “grow” oil and gas production at all, businesses will need to keep investing increasing amounts of money (and energy) into oil and gas extraction, Tverberg writes. For this to happen, prices paid by consumers for oil and gas will need to continue to rise.
Oil prices are still high, Tverberg writes, and will continue to be so if we expect to have more tight oil and more oil from other unconventional sources. Tverberg offers 10 reasons why high oil prices are a problem.
High oil prices and continued oil problems around the world will likely push the US economy into a severe recession by the end of 2013, Tverberg writes.
Countries like China and India which leverage their oil use to a greater extent with more coal use are less affected by a rise in oil prices – Tverberg writes. It's one reason why jobs are moving to China and India, and away from the US.
Tverberg explores the connection between changes in the oil market and growing concern of the 'fiscal cliff.'
A new forecast that the US will surpass Saudi Arabia in oil production is unrealistically optimistic. Oil prices would have to rise far too much for unconventional oil to meet forecast levels.
Tverberg offers an alternative theory to the traditional economists' view of limited oil supply and Hubbert's peak oil theory.
People who are counting on natural gas to solve the world’s energy problems are 'counting their chickens before they are hatched,' Tverberg writes. Natural gas requires a lot of infrastructure and up-front costs to obtain satisfactory results.
High oil prices and rising gas prices weaken an economy because they reduce discretionary spending and indirectly cause people to be laid-off from work, Tverberg writes. Can the US economy stand another jump in prices?
The major issue for many countries is that oil is becoming too expensive for the economy to afford, Tverberg writes.
Economic and job growth are closely tied to energy consumption. While jobs can grow faster than energy use when efficiency kicks in, the cost may be lower wages.
Does rising GDP really boost energy consumption? A long look at history suggests that energy is the driver.
For starters: Without the energy to cook their food, humans would have much more limited food supply and spend half the day eating.