Drilling for Broke? Experts Debate ‘Peak Oil’

Are we nearing a peak in global oil production?

Soaring demand for oil in the U.S. and in booming economies like China and India has led to increased watchfulness about inventory levels among traders. At the same time, oil companies are scrambling to find new sources for crude, while investors ask more questions about firms’ proven reserves.

Amid all this, oil prices have been racing to nominal highs. Benchmark crude soared to a new intraday record of $62.30 a barrel on Monday after the death of Saudi Arabia’s King Fahd and settled at a new closing high of $61.89 on the New York Mercantile Exchange Tuesday as gasoline futures prices soared.

WSJ.com asked economist blogger James Hamilton of the University of California at San Diego and Robert Kaufmann of Boston University’s Center for Energy & Environmental Studies to take a closer look at the notion of “peak oil” and explore the economic ramifications of a drop in oil production.
Wall Street Journal