So despite any temporary declines we might see as the American economy goes south, the reality is that oil is going to keep heading up. Sorry to the SUV owners out there.
As a bonus, all the current Saudi oil development is going towards replacing production declines from older fields, including Ghawar, the mother of all oilfields. This is a sucker's game, which means we're probably looking at absolute production declines in Saudi Arabia before 2020. (That's a wild-ass guess on my part, but once Ghawar goes terminal there's little to nothing the Saudis could do to bounce back.)
An additional note: as the largest, oldest supergiants (like Ghawar, or Cantarell in Mexico, or others like Burgan in Kuwait) all start to go in to decline, we'll increasingly be replacing production from these fields with production from smaller fields, that have been tapped more recently, and often use secondary- and tertiary-production measures, which end up increasing production at the cost of more rapid decline when it comes. The net result of all this is that as our oldest, more productive fields go in to decline, the average rate of decline of global production is going to go up as smaller fields start to make up a larger percentage of all production.
Or, as they put it at the Oil Drum:
The evidence seems to be pointing to an overall increase in the global decline rate for existing wells. What this means is that, if world production is around 86 million barrels a day, then to replace existing declines next year, an additional new production of 4.47 mbd at 5.2% decline, instead of the 3.87 mbd required at 4.5% decline, will be needed just to stabilize supply at a fixed level. If the rate is accelerating this difference of 600,000 bd will increase and drop the top line of the curves such as those that Khebab and others have so carefully assembled.
This increased decline rate is already being reported, and thus the potential peak in 2010 that the graph shows is already at risk and we may struggle to get much above the numbers that we are at today.