Years ago, I read a paper explaining why oil price can’t go above a certain threshold. Oversimplifying it, the economic system can’t work above a certain cost of energy, so when this level is surpassed, some business will stop being profitable, the demand for oil will decrease and prices will go down. I might be missing some nuances and probably I’m not explaining it completely accurate, but this is how I understood it.
I would love to find the paper again to go through it, but unfortunately, I can’t recall the title nor the authors. I wonder if someone here have some references about the topic of how expensive an oil barrel can become before demand starts to shrink.
Years ago, I read a paper explaining why oil price can’t go above a certain threshold. Oversimplifying it, the economic system can’t work above a certain cost of energy, so when this level is surpassed, some business will stop being profitable, the demand for oil will decrease and prices will go down. I might be missing some nuances and probably I’m not explaining it completely accurate, but this is how I understood it.
I would love to find the paper again to go through it, but unfortunately, I can’t recall the title nor the authors. I wonder if someone here have some references about the topic of how expensive an oil barrel can become before demand starts to shrink.