At The Peak  

Axis of Logic has an article claiming we are bumping along the top of Hubbert's Peak, which seems pretty reasonable given the confused mutterings from OPEC lately.

However, there is a simple explanation for the steady rise of oil prices and the curious obfuscations of OPEC spokesmen. We are nearing the phenomenon of global Peak Oil. We’re probably not there yet, just bumping along near the top of the Hubbert Curve. OPEC has only a limited capacity to pump any more oil. ”One does not have to be a convert to the “Peak Oil” concept to be aware that outside the FSU [Former Soviet Union] oil production appears to be very near peaking, with output from new discoveries just barely offsetting depletion in mature producing conventional oilfields.”

If we have hit the structural production peak of oil worldwide, then the trajectory of prices will be relentlessly upward, with only temporary respites. The spokesmen will blather on about ‘terrorism’ or ‘refinery fires’, but the prices will tell the real story. If the increasing prices start a recession that reduces demand, there will be another temporary ‘respite’ as production continues a relentless decline after we have gone over the peak.

“Oil prices will rise through 2008 and stay high thereafter as demand increases and concern mounts that global production is nearing its peak,” according to analysts at Lehman Brothers Holdings Inc.

When Lehman Brothers admits oil is peaking on Bloomberg, its time to fasten your seatbelts. The ride is going to be rocky.