Peak Oil? Crude Hits Record As Supply Falls Short

Oil hit a record high price of $78.21 a barrel yesterday, and some analysts predicted the price could rise to a mind-boggling $100 a barrel -- because the supply of oil is expected to fall short of demand.

That discrepancy has a lot to do with volatility in oil-pumping regions, problems at oil refineries and ever-increasing demand around the world.

The concept of peak oil has to do not with production shortfalls, but shortfalls of raw oil in the ground around the world:

The idea is that the exhaustion of oil reserves is less important than the point at which we're pumping as much as humanly possible. After that point, the amount of oil available drops continuously, regardless of demand for it.

Think of this as peak oil light. The result -- higher prices -- is similar.

COMMENTS ()