...Oil has zoomed to surreal levels, briefly hitting a record high of $145.85 a barrel in trading Thursday morning. That’s more than double a year ago, despite increasing fuel-conservation measures and a sputtering U.S. economy reeling from six straight months of job losses. The average U.S. gas price nationally for regular is a record $4.09.8.
But here’s what is really scary: Even though oil prices have been rising sharply for several years and that has encouraged additional drilling, the global supply of oil has increased only modestly. Output is actually falling in some substantial oil-producing nations as a result of declining fields, civil war or other issues.
The International Energy Agency, in a troubling new report, predicts that the supply-demand picture will worsen beginning in 2011, with spare production capacity falling "to minimal levels" by 2013. Global demand will grow from 86.9 million barrels per day this year to 94.1 million barrels by 2013, a sizable jump of 7.2 million barrels, the IEA forecasts.
That could put additional upward pressure on prices. Some analysts and government officials in foreign nations are warning that oil could hit $200 to $250 a barrel, with gas prices shooting to $6 or $7 a gallon. There’s an escalating fear that the world is reaching "peak oil," the level at which production will begin an inevitable decline as aging fields gradually peter out.
Star Telegram
