World oil production is likely past its peak
Oil prices still trending lower, may sink below $50. But as is obvious, what we’re seeing is a blip, not a trend, even if it persists through 2009.
An article by The Oil Drum’s Gail the Actuary is a must-read. No subsector within the energy industry is doing well at the moment.
Here’s the takeaway paragraph:
The net impact of all these issues is that oil production has already started to decline. Plans for future investment have been cut back, so it is likely that oil production will stay low for quite some time. Even if prices should rebound, lack of credit will limit the ability of the oil supply chain to increase production. For these reasons, world oil production is likely past its peak.
Michael Vickerman
