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This is about two weeks out of date, but it merits our attention. When the founder of the Lundberg Survey says global oil production has reached its peak, its more than just an uninformed opinion.

Note that the current shortage of refining capacity reflects industry's reluctance to invest in new refineries, because in the near future there may not be enough oil for them to refine.

Tom

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Higher Oil Prices Reflect "Peak Oil"--Global Oil Reserves Are Declining as Consumption Increases
From Environment News Service <www.ens-newswire.com
Analyst: U.S. Gas Price Shows Shrinking Global Oil Reserves

BERKELEY, California, August 16, 2005 (ENS) - On Friday, crude oil prices soared to a record $67.10 per barrel, a rise of nearly $10 a barrel over the three weeks that ended Friday. They have fallen off a few cents today, but gasoline prices are still at record levels.
Regional gas prices are highest on the Pacific Coast, averaging $2.71 a gallon, compared to a low average of $2.43 in the Mountain West.
The well known Lundberg Survey on Saturday attributed the high gasoline prices to high crude oil prices, but petroleum analyst Jan Lundberg, who founded the Lundberg Survey and then left the business in 1988, has a different explanation. He says global oil extraction has reached its peak. "The peak of world oil extraction is approximately now, although reserves data from the oil industry and OPEC are notoriously unreliable," he said Sunday.
"Shortage of crude oil has started to make itself felt, as strained production levels of the most useful crudes reflect tight supply. It is true that oil demand has managed to reach record levels, but oil fields inevitably peter out," he told Fox News Radio.
Nearly 20 oil exporting countries are past their peak in production, and Saudi Arabia is showing signs of leveling off, Lundberg warned.
"Refining capacity is almost maxed out, but industry sees little point in building more refineries when crude supply is in doubt," Lundberg added. World discoveries peaked by 1965, and the trend in declining discovery is unalterable. U.S. production peaked in 1970.
"Growth of the economy ends when petroleum is in short supply. When the market really feels the gap between supply and demand widen, the price will go through the roof.
"Alternative energy sources are not ready. The coming oil shock will signal an historic flip-over from expanding our civilization via petroleum dependence to seeing the commencement - after "petrocollapse" - of a reversion to sustainable living based on local ecological capacity. The short answer to 'What do we do now?' is conserve, radically."
Steven Roach, an analyst for Morgan Stanley said, "I don¹t know where oil prices are going. But I do feel strongly that an important macro threshold has now been breached - one that adds unmistakable tension to the world economy¹s greatest imbalances."
Some analysts forecast oil costing around $70 a barrel in the short term. Others say it will soar even higher.
Jean-Francois Giannesini, an oil expert at the French Oil Institute said, "Prices are going to keep rising, maybe to $80 or $100 a barrel, until consumers decide to reduce their consumption. Until we have reached that level, they will not cut back," he told Europe 1 radio last week.
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