Those quick to deride peak oil theory also don’t know Jack

…The problem in all this is that the peak oil theory isn’t about $78-a-barrel oil. And the price of abundance isn’t necessarily $63.

The factors that pulled oil futures prices from $78 to $63 are short-term realities in a very long cycle. The forecasted hurricanes never came. Chevron hit pay dirt. Iranian President Mahmoud Ahmadinejad was suddenly sounding less like Dr. Strangelove on his nuclear intentions. Members of the Organization of the Petroleum Exporting Countries met in Vienna and said they won’t lower production quotas.

BP said its leaky pipes in Prudhoe Bay might be on-stream earlier than first thought. The global economy looked to be on a downward slope, taking a bite out of demand.

Perhaps most importantly, oil follows seasonal patterns. And without a major hurricane, U.S. oil demand typically shrinks at this time of year because the summer driving season is over and the winter heating season is still months away.

All these things are really just trees, obscuring the view of the horizon. Don’t let them trick you into thinking the landscape has fundamentally changed since mid-August.

Globe and Mail