When times get hard, the price of oil usually goes down, reflecting demand decline due to slowing economic activity. So, asks The Burning Platform, “Where is our oil price collapse?” Excerpt:

We’ve clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices.

But, a funny thing happened on the way to another oil price collapse. It didn’t happen. WTI Crude is trading for $87 a barrel, up 23% since January 1. Unleaded gas prices are up 54% in the last year and 43% since January 1. Worldwide oil pricing is not based on WTI crude but Brent crude, selling for $113 per barrel, only down 10% from its April high of $125. The U.S. and Europe consume 40% of all the oil in the world on a daily basis. Multiple European countries have been in recession for the last nine months. The U.S. economy has been in free fall for six months.

In fact, oil consumption in the US and Europe has been declining, owing to the economic contraction. But that slack has been taken up by others, especially China and India. So why haven’t oil-producing countries been pumping more oil? Because they can’t. The oil is not there to pump. The era of cheap oil is over. Read on:

The world is trapped in an inescapable conundrum. As supply dwindles, prices increase, causing global economies to contract, and temporarily causing a drop in prices, except the lows are higher each time. The drill, drill, drill ideologues do nothing but confuse and mislead the easily led masses. We have 2% of the world’s oil reserves and consume more than 20% of the daily output. We consume 7 billion barrels of oil per year.

Drilling for oil in the Arctic National Wildlife Refuge in Alaska and areas formerly off limits in the Outer Continental Shelf will not close the supply gap. The amount of recoverable oil in the Arctic coastal plain is estimated to be between 5.7 billion and 16 billion barrels. This could supply as little as a year’s worth of oil. And it will take 10 years to produce any oil from this supply.

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Just like our accumulation of $4 billion per day in debt, peak oil is simply a matter of math. We cannot take on ever increasing amounts of debt in order to live above our means without collapsing our economic system. We cannot expect to run our energy intensive world with a depleting energy source. There is no amount of spin and PR that can change the math. Un-payable levels of debt and dwindling supplies of oil will merge into a perfect storm over the next ten years to permanently change our world. The change will be traumatic, horrible, bloody and a complete surprise to the non-critical thinking public.

None of this is being addressed by the presidential candidates. Romney gave a pie-in-the-sky set of remarks about how he’s going to make the U.S. energy-secure by developing more domestic sources of energy. Good luck with that, Mitt. We simply don’t have enough of the stuff here to sustain our own needs. And there’s not enough of the stuff left in the ground for us to buy at the rates to which we’ve become accustomed. The law of supply and demand is unyielding.