Monday, April 10, 2006

Oil's Well That Ends Well

The Globe and Mail is reporting on the continuing rise of oil prices:

Light, sweet crude for May delivery rose $1.36 to $68.75 a barrel on the New York Mercantile Exchange. If the gains stick, it would be the highest closing price since Sept. 1, when Nymex futures settled at $69.47.

My recent analysis of global production numbers leads me to believe that the Hubbert Peak of oil production was in June 2005. It is probably only massive efforts by producers that is delaying significant production decreases for perhaps a couple more months.

Given the fact that demand for oil will soon be running off ahead of supply, the oil price is a huge capitalist bargain. However, the pain of $2.79/Gal. and rising gas at the pumps is real and must get worse.

We must all learn to live without oil. And remember that when we say oil, we mean gasoline, plastic, fertilizers that allow large-scale agriculture, and many of the other building blocks of this civilization.

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