Monday, November 30, 2009

The knock-on effects of peak oil | Business | The Observer

High oil prices generally cause economic recessions. The trouble in Dubai is due to decrease in oil consumption due to the current economic recession likely triggered by the high oil prices in 2007-8. What's keeping oil prices in check currently is the recession causing lowered demand. If/as the recession lifts and economic activity returns to "normal" oil demand should rise again. Since it seems oil production cannot return to meeting rising demand, then high oil prices should result, again. Which would cause another recession.

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