What's up with oil prices? Well, it's not speculators, and there's no relief in sight, meaning at least five more years of high prices with no easy fixes. The ugly truth? Peak oil isn't fringe anymore--it's going mainstream. That's the reading from the latest oil market report from the International Energy Agency, the rich-country energy watchdog. The IEA's latest x-ray of the oil market includes plenty of disturbing nuggets. The fact that there are no growing stockpiles of crude around the world, for example, suggests speculators aren't behind crude's dizzying rise this year (much to Paul Krugman's satisfaction and Congress' chagrin.) And while U.S. drivers fret and worry over how to pay for the Prius, the sad truth is that it doesn't matter: By 2015, developing country oil demand will outstrip the rich world's. They're already in the driver's seat: 90% of the demand growth over the next five years will come from Asia, the Middle East, and Latin America, the IEA said. But the juiciest nugget? The conservative IEA appears to be inching ever-closer to the "peak-oil" crowd. Supply simply can't keep pace with demand--everybody with an oil well has the taps open, but there's not much left in the keg. Oil fields are aging quicker than free-agent pitchers, and the global oil industry has to run faster just to stay in place. So where's that fresh supply going to come from? As the IEA noted, Saudi Arabia is the only country with a glimmer of spare production capacity--and the jury is still out on that. Increased domestic drilling, the U.S. energy agency already said, would be but a hiccup in the global market. Non-OPEC countries, from Norway to Mexico, are expected to chip in just 1.2 million barrels per day of new crude by 2013, IEA head of market analysis Lawrence Eagle said--or less than half the global shortfall. Politicians can pick their bogeyman--be it speculators, OPEC, or Democrats. But more and more it seems like the oil connundrum boils down to an age-old truth: Finite supplies can't meet infinite demands.
What's up with oil prices? Well, it's not speculators, and there's no relief in sight, meaning at least five more years of high prices with no easy fixes. The ugly truth? Peak oil isn't fringe anymore--it's going mainstream.
That's the reading from the latest oil market report from the International Energy Agency, the rich-country energy watchdog. The IEA's latest x-ray of the oil market includes plenty of disturbing nuggets.
The fact that there are no growing stockpiles of crude around the world, for example, suggests speculators aren't behind crude's dizzying rise this year (much to Paul Krugman's satisfaction and Congress' chagrin.)
And while U.S. drivers fret and worry over how to pay for the Prius, the sad truth is that it doesn't matter: By 2015, developing country oil demand will outstrip the rich world's. They're already in the driver's seat: 90% of the demand growth over the next five years will come from Asia, the Middle East, and Latin America, the IEA said.
But the juiciest nugget? The conservative IEA appears to be inching ever-closer to the "peak-oil" crowd. Supply simply can't keep pace with demand--everybody with an oil well has the taps open, but there's not much left in the keg. Oil fields are aging quicker than free-agent pitchers, and the global oil industry has to run faster just to stay in place.
So where's that fresh supply going to come from? As the IEA noted, Saudi Arabia is the only country with a glimmer of spare production capacity--and the jury is still out on that. Increased domestic drilling, the U.S. energy agency already said, would be but a hiccup in the global market. Non-OPEC countries, from Norway to Mexico, are expected to chip in just 1.2 million barrels per day of new crude by 2013, IEA head of market analysis Lawrence Eagle said--or less than half the global shortfall.
Politicians can pick their bogeyman--be it speculators, OPEC, or Democrats. But more and more it seems like the oil connundrum boils down to an age-old truth: Finite supplies can't meet infinite demands.
Did the WSJ just praise Paul Krugman and defend the Democrats?
I think I need to lie down. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
That is not praise, in the Murdoch universe. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
