Saxena: Peak Oil Price Sea-Saw To Continue; Cause Next Recession

``... within the course of a single year, the [IEA] lowered its production estimate by 10 million barrels per day! To complicate matters further, the IEA’s latest forecast of 96 million barrels per day of peak production depends on the assumption of finding an extra 900 billion barrels of oil over the next 25 years! However, given the fact that over the recent past, we have managed to discover only 10 billion barrels of oil each year, we cannot help but take the IEA’s rosy forecast with a pinch of salt. Call us skeptics, but at the current rate of discovery, it will take us 90 years to discover 900 billion barrels of oil... it is our firm belief that ultimately, oil will only be used for its highest uses (agriculture and aviation)... If history is any guide, the price of oil will not rise in a straight line and the secular uptrend will be punctuated by severe economic recessions... Turning to the current situation, the price of oil is trading around US$90 per barrel (Figure 2) and during the course of this business cycle, we expect it to surpass its previous record of US$147 per barrel.''