I think that most of you misunderstood what I was saying, primarily because my missive was poorly worded. Note that I am talking about the price levels reached during price declines, and not the magnitude of the decline.
Empirically since the late Nineties, the price level reached during each successive year over year decline in annual Brent crude oil prices significantly exceeded the price level hit during the prior year over year decline in annual Brent crude oil prices.
If the prior pattern holds, the next year over year decline in annual Brent crude oil prices would bring prices down to roughly somewhere between $115 and $160.
If we look at rates of change instead of simple percentage increases, the 1998 to 2001 rate of increase was 20%/year, and the 2001 to 2009 rate of increase was lower, at 12%/year:
Here are the successive annual Brent peaks, following price declines:
2000: $29 (40%/year rate of increase, 1998 to 2000)*
2008: $97 (20%/year rate of increase, 2001 to 2008)
So, in recent years the rate of increase in annual Brent peaks (prior to declines) has been between 20%/year to 40%/year, while the rate of increase in annual Brent lows has been between 12%/year and 20%/year. In other words, a cyclical pattern of higher annual price highs and higher annual price lows.
If we see an annual Brent price decline in 2013, the 2009 to 2012 rate of increase in prices ($62 to $112) would have been about 20%/year, and the 2013 annual price level would presumably not fall below $100 (based on prior rates of change).
*As annual Brent prices were increasing at 40%/year from 1998 to 2000, the Economist Magazine ran their $5 oil price cover story, in 1999.
Note that the following recent article posted on Peakoil.com is on point:The Shale Oil Revolution Is Already Ending And Oil Prices Are Going To Surgehttp://peakoil.com/production/the-shale-oil-revolution-is-already-ending-and-oil-prices-are-going-to-surge