We're still not approaching "peak oil":

A landmark study of more than 800 oilfields by Cambridge Energy Research Associates (Cera) has concluded that rates of decline are only 4.5 per cent a year, almost half the rate previously believed, leading the consultancy to conclude that oil output will continue to rise over the next decade.

Peter Jackson, the report's author, said: “We will be able to grow supply to well over 100million barrels per day by 2017.” Current world oil output is in the region of 85million barrels a day.

The optimistic view of the world's oil resource was also given support by BP's chief economist, Peter Davies, who dismissed theories of “Peak Oil” as fallacious. Instead, he gave warning that world oil production would peak as demand weakened, because of political constraints, including taxation and government efforts to reduce greenhouse gas emissions.

That would imply falling prices, to me. I stand by my prediction that oil will never be sustained for long at its current price levels (adjusting for inflation and exchange rates).

I stand by my prediction that oil will never be sustained for long at its current price levels

In that case, Nostradamus, you can put your money where your mouth is, by selling short the oil future for December 2015. It is currently trading at over $86.

Although it is true that exchange rates have taken a toll. The dollar has lost a third of its value against the Euro since 1999.

Careful Rand, I think Nostradumbass is trying to make yet another point about the rotten economy, high oil prices and GWB's overall involvement.

I could be wrong though, most of my oil investing is done at the price per tank full level. Usually in $40 to $50 increments. Oil futures at my house are based solely on how much I drive.

Didn't OPEC say that they couldn't increase production of oil because there was not enough refinery infrastructure to catch any new supply? And why is that? If gas demand is going through the roof, why aren't there new refineries to supply it?

When the market isn't appearing to work - look for government meddling.

In currencies other than the dollar oil prices are not climbing as much. A lot of this is the fall of the dollar.

We, America, have been spending on our National Credit Card. This is coming home to roost, we can't afford things like the wars in Iraq etc....

So we now have a potential recession so what do the dim bulbs in Washington do? They spend even more money on a stimulus package ! ARGHHHHHHHH.

Didn't OPEC say that they couldn't increase production of oil because there was not enough refinery infrastructure to catch any new supply?

Is it in their interest to maximize production? When demand rises faster than supply, which this year it certainly did, they profit by saving most of their oil for the future.

Might you define long?

Donut: The refinery crunch is a different problem. Refiners can't get permission to build new refineries, and are having a heck of a time just getting permission to expand their current throughput. It's not a market problem, it's a government/NIMBY problem, and together with issues like the boutique blends, leads to higher gas prices somewhat independent of the price of oil.

OPEC profits best by not losing market share to non-OPEC sources. If they deliberately drive up the price of their oil, they encourage non-OPEC producers -- such as those in the United States -- to invest in exploiting reserves that would, in a normal oil market, be too expensive to extract.

There's an oil boom going on in many parts of the U.S. these days, with resources being developed that had been lying fallow because there just wasn't enough money in it.

I'm not sure how OPEC benefits by inviting more competitors into the market. Either they're undercutting their own market power on purpose for some reason, or they're doing so unintentionally, perhaps out of stupidity.

There will be a peak oil production year, just as there was a peak foaling year for horses, and for the same reason. Anybody who worries about it is, with all due respect, a moron.

Back during the stone age there were wild predictions about the arrival of "peak stone". Was the era of stone over? What would happen to civilization when all the stones were used up? Policymakers came up with plans to tax stone to decrease its use. Others favored mandates for smaller stone tools and stone structures. Still others pestered for government incentives to create viable alternatives to stone. Regrettably, nobody acted on these sound plans and the stone age did end. The price of stone got just too damn high for anyone to want or need stone anymore.

Opec (the Saudi's) have kept oil flowing normally because if prices rose to high people would look around for other options. In the 80s it was smaller cars and ethanal pork.

During the 90s oil flowed, Suvs started showing up, and alternate fuel bets were put on Hydrogen which is always 20 years out.

I believe the tech is finally there with flex-fuel (Zubrin's interview with Instapundit sold me) and combined with the current high oil prices and a Presidential contest... Well I think that Opec may have screwed up at the worst time by not doing everything possible to get the prices down before now.

While the Stone Age was not believed to have ended on account of Peak Stone, or perhaps Peak Flint or other prime grades of stone, there is some speculation that the Dark Ages that came at the end of the Bronze Age had to do with Peak Tin.

Paul,
that's absolutely great.

Paul,

What about them impending peak German Shepard AKA Peak Rin Tin-Tin?

Jim, in the link above, you can see that the market thinks oil will drop for the next five years. In that case, it's in SA's interest to pump as much as possible (without causing the rest of OPEC to detect cheating). And for the subsequent 5 years, oil is expected to be rising at less than the expected level of inflation. Again, dominant strategy is to pump all you can if you're Saudi Arabia. This is consistent with Wind, Nuclear, and Solar electric cars, Biofuels, better extraction technologies and hybrid transport technologies cut the demand for oil relative to its supply. If you think it will rise, buy the 2015 future or oil company stock. Recall also that in 7 years, incomes around the world including in the states will be up by about 20%. Thus if inflation is about 3%, we can expect oil to be 40% cheaper in terms of hours worked. And if one drives a hybrid car, a mile will cost 70% cheaper in 2015 than today. Throw in $2500 cars from India and driving will get really cheap. Nice crisis. Let's have more of them. This is your cue to stop complaining about peak oil and shift to complaining about global warming.