Oil Price Tops $82 A Barrel. Do I Hear $85? $90?

Three Record-Setting Days Has One Analyst Thinking Big, And Others Thinking About Peak Oil

Thursday’s oil topped $82 a barrel, capping — perhaps — three straight days of record high prices, according to numerous reports in the press. At least one big name analyst foresees prices rising to at least $85 and perhaps $90 by the end of the year.

Light sweet crude for delivery rose 31 cents to $82.24 a barrel, in New York’s main futures contract, according to AFP.

Even before the price topped out today, Goldman Sachs had forecast $85 a gallon barrels by year’s end, with “significant risks of a spike above $90″ according to numerous reports.

Why? High demand and tight supply.

All this talk about a gap between demand and supply gets people talking about Peak Oil — the idea that the world has pumped about as much oil as it can — cheaply anyway — and we’re looking sooner rather than later at an era when demand consistently outpaces supply. OPEC, when it met earlier this month, agreed to increase oil supply by a “token” amount, to use the word used by the Associated Press. Read More

The End of Oil?

A small - but growing - group of experts think world oil production will peak in the next few years, to devastating effect. September 14 2007

NEW YORK -- At some point in the near future, worldwide oil production will peak, then decline rapidly, causing depression-like conditions or even the starvation of billions across the globe.
That's the worst-case scenario for subscribers to the "peak oil" theory, who generally believe oil production has either topped out or will do so in the next couple of years.
A small but growing group of experts think oil production will peak in the next few years, then decline rapidly. The result could be worse than the Great Depression.

What follows depends on who one talks to, but predictions run the gamut from the disaster scenario described above to merely oil prices in the $200-a-barrel range while society transitions to other energy sources.

It's not a view held by most industry experts, including the oil companies, the government and most analysts at the financial houses.
But its adherents are growing, and include some fairly well-known names.
In the coming week, a former chairman of oil giant Royal Dutch Shell (Charts) is speaking at a peak oil conference in Ireland, as is former U.S. Energy Secretary James Schlesinger.
Most peak-oil proponents simply don't believe the numbers put forward by industry and the government.

The world will produce 118 million barrels of oil a day, up from its current 85 million barrels per day, just to satisfy projected demand by 2030, according to the Energy Information Agency.
"That's never going to happen," said Richard Heinberg, a research fellow at the Post Carbon Institute and author of three books on peak oil.
Heinberg says world production of regular crude oil actually peaked in May 2005. He also says production in 33 of the 48 largest oil producing countries is in decline, and that global oil discoveries peaked in 1964. Read More