Putting Peak Oil to the Test in 2007

Energy prices have soared over the past week, due in most part to a powerful cyclone that hit Oman, shutting down a terminal shipping 650,000 barrels of oil per day. But once the storms stop, however, peak oil will ensure those prices remain at record setting levels.

…One of the most telling signs that we’re experiencing the effects of peak oil is the unprecedented price oil is reaching. If I were writing just a few months ago, I’d mention how OPEC was comfortable with a barrel of oil trading at $50. But now they’re saying they’re happy with oil between $60 and $65 a barrel.


But high prices are good for exploration, aren’t they?

That has usually been the case, at least. My older readers will remember the trouble we were in during 1981. Surely you remember the massive lines to fill up your tank. Oil prices reached record levels, which prompted companies like ExxonMobil to spent almost $40 billion on new exploration programs.

Energy and Capital