62. DO HIGH OIL PRICES PROVE THAT PEAK OIL IS HAPPENING?
ANSWER: No. High oil prices don't conclusively prove anything. In real terms, oil prices spiked higher than now in the late 1970s, but that didn't mean that oil peaked. Oil production continued to grow after the period of high prices, as can be seen from the following charts:
Inflation-adjusted oil prices (click on the image for a clearer picture, source):
World oil production (source: EIA, Annual Energy Review 2004, P. 306):
Why did prices go up in the 70s? There must have been a reason. Not even speculation? Help me understand this.
Oil embargo by the Iranian government, I think...
I definately agree that high oil prices dont mean that we've hit PO. Why?? Because the price of crude only makes up half of the price of oil. The other half is purely speculation...and other things. So if oil today costs around $65 a barrel, the actual price of crude costs somewhere around $30-35. That doesn't seem to point to a decline in oil production to me..but i'm not a geologist either.
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