[ricw]

Given that we have likely hit peak demand for fossil fuel (the theory being that the demand for fossil fuel has peaked before we have reached peak supply), this is unlikely. Oil prices are unlikely to ever reach the highs of $100+ ever again. Or so goes the theory..

In short, flight prices are unlikely to be severely effected by oil prices again.

[bmh_ca]

> Oil prices are unlikely to ever reach the highs of $100+ ever again.

Since the oil price crash, investment in exploration has gone down dramatically, so I would argue the contrary.

When the current supplies start to dwindle, I would not be surprised to see oil prices strike $200 or more a barrel.

The oil crash removed the cost of exploration from oil prices, so current prices are no longer a indication of probable future supply.

There's a multi-year lag between exploration and crude coming to market. While futures/derivatives can cover that exploration for future crude extraction, there's a growing spectre of competitive alternative energy that will likely reduce the attractiveness of crude – i.e. there being higher risk of relative oil obsolescence, the anticipated return on futures diminishes, meaning less money going into exploration, even with what will be present-day high prices.

Given the lag in investment, I suspect that when the "spike" comes people will look as much to ramping up more immediate alternatives (solar, wind) than exploring for oil.

The above is all speculation of course, but the 5-10 year market forces at work are not pushing towards lower or even stable oil prices, but towards much higher ones – at least until demand drastically drops, which some figure is at least 15-20 years out.

Just my 2¢.

[davidf18]

> "Since the oil price crash, investment in exploration has gone down dramatically, so I would argue the contrary...."

The fracking technology for oil and gas is still on it's Moore's Law curve and is getting cheaper and cheaper so in fact more and more fracking is coming on-line so that we're unlikely to see prices much above $50 per barrel.

Mar 21, 2017 https://www.bloomberg.com/news/features/2017-03-21/big-oil-s...

April 12, 2017 https://www.bloomberg.com/view/articles/2017-04-12/u-s-shale...

[bmh_ca]

Good point. It just occurred to me that the spectre of shale that you highlight also counter-incentivises exploration, perhaps more so than alternative energy.

[protomyth]

> Since the oil price crash, investment in exploration has gone down dramatically, so I would argue the contrary.

I keep http://oilprice.com/ in my RSS feed to keep tabs on the subject. It looks like the shale exploration is kicking up again (from the site and from friends working in the western part of ND).

and this helps http://oilprice.com/Energy/Oil-Prices/Why-Breakeven-Prices-A...

[Retric]

$100 per barrel is still cheap. It had minimal impact on usage, and with most of the world trying to ramp up to a western lifestyle demand is unlikely to drop in the next 20 years.

PS: Oil is 53$ per barrel right now, 2x price spikes in commodity prices are fairly common historically.

[marcosdumay]

> the theory being that the demand for fossil fuel has peaked before we have reached peak supply

Demand == Supply

And that's even more true¹ for stuff like oil, that has a low volumetric price. Do you really think demand peaked because people could not find more uses for the stuff?

Oil is in a peak production crash. The prices volatility is a natural consequence of it, and will always stay as high as consumers' budgets allows.

1 - That means, it's true for almost any misleading definition of those terms you can come-up with.