Morningstar, an UK investment journal, has posted a long, interesting piece about so-called "peak oil," the notion that because supplies of oil are likely finite, at some point in time, commodities prices will start to steadily and irreversibly increase as the world's supply starts to dwindle and demand either increases or remains constant. The piece notes that the question of predicting such a market condition is sort of moot because we won't exactly know we've hit peak oil until we're already past it. However, it also notes that most of the "obvious" oil fields have already been discovered or developed, and that new discoveries are coming more and more from crazy-difficult deposits, such as the recent Tiber well, 39,000 feet beneath the surface of the Gulf of Mexico. What's more, a recent presentation at an industry conference seemed to indicate that production will reach the volume commonly thought to be the peak sometime in 2016. That's just the supply side, but the piece discusses developments on the demand side too, including alternative energy trends, China's increasing use of automobiles, and how overall oil demand tends to lessen when oil prices rise. If prices go too high, recessions often result, which usually cause the oil price to drop, and the piece ends asking, "What do we do when producers require $80 [per barrel] oil to add new production, but oil prices that high keep us at recession's edge?"
Read much, much, much more here.