It might seem like the price of oil peaked recently and prices are heading back down.
But a report by the International Energy Agency has conceded that global crude oil production has already peaked and that the commodity will become more and more expensive.
This is the first time that they have admitted this. According to their analysis production peaked in 2006 – yikes! So it would seem that we are well over the hump and on the way down in terms of global production of oil.
Simple economics of supply will inevitably drive prices up.
The agency’s chief economist, Fatih Birol, said “peak oil” was reached in 2006. He said that he expected oil prices to rise by 30 per cent over the next three years.
“The existing [oil] fields are declining so sharply that in order to stay where we are in terms of production levels in the next 25 years, we have to find and develop four new Saudi Arabias,” Dr Birol said.
All this may explain the jitters surrounding the US economy, and consequently the global economy.
Role on the alternative energy mode de vivre – it’s the way of the future.
