Upper Limit on Oil Prices

The oil prices can't go up indefinitely. There is a certain point at which the benefits of purchasing oil become out weighted by the costs of purchasing. Lets see some numbers:

World GDP in 2008 = 60 trillion dollars

World Total Energy Consumption in 2008 = 500 Exa Joules = 0.5 x 1021 = 0.5 billion trillion joules.

Contributions of Energy Resources are:

Oil           180  Exa Joules   =  36%
Gas           110  Exa Joules   =  22%
Coal          120  Exa Joules   =  24%
Hydro          30  Exa Joules   =   6%
Nuclear        30  Exa Joules   =   6%
Renewables      4  Exa Joules   =   1%

TOTAL         474  Exa Joules   = 100%

As seen above oil contributes 36% of energy that is consumed by world economy. Since energy by definition is ability to do work and there is no economy without work therefore its reasonable to conclude that roughly 36% of world economy is due to consumption of oil. That is, 18 trillion dollars. Since oil consumption is 30 billion barrels therefore its safe to estimate that on average each barrel of oil consumed adds 600 dollars in gdp.

Armed with this rule of thumb and with the knowledge that world economy collapsed when crude oil price reached $147 it can be estimated that the upper limit on price of crude oil is equal to 25% of its average contribution in world's gdp.