Boy am I sure glad I only have to drive 10 miles to work everyday.
The reasons for the recent relentless rise in crude oil prices are pretty straightforward — including a record string of hurricanes slowing shipments and closing oil rigs in the Gulf of Mexico. The list also includes political instability in oil producing regions from Iraq to Nigeria. But with oil prices rolling toward all-time highs, the longer-term forecast for oil prices is much less certain. [...]The central cause of the run toward $50 a barrel is simple: For the first time in the history of the modern oil industry, global demand continues to rise faster than the world’s capacity to produce more crude.
Read: China
One camp believes that while short-term disruptions will continue to produce price spikes, the world still has plenty of oil. But the other camp argues that oil production is near — or at — peak levels, and total global output will soon begin a gradual decline just as it did in the United States when oil production peaked in 1970. Though alternative fuels and gains in efficiency may ultimately wean the world off oil, proponents of “peak oil” theory say that the transition might not happen quickly enough. If it doesn't, they warn, the result could be extremely painful.“We really are close enough to the edge to have no excess capacity. Demand growth shows no sign of slowing and now it seems to be accelerating,” said Matt Simmons, a Houston-based investment banker. “It’s really important to know what the real story is — as bad as it may be.”
I just love the nay-sayers. The oil will last forever, of course. [/snark]