Global oil production is not likely to peak anytime soon, contrary to talk that has helped propel prices close to $60 a barrel, although lower prices may still be a few years away, a prominent energy consultancy said Tuesday.

Cambridge Energy Research Associates said that, instead of a crest being reached sometime this decade, an inflection point in world oil output will occur sometime beyond 2020, after which production will plateau for several more decades.

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The price of oil could "slip well below $40 a barrel as 2007-08 nears," CERA said.

As the U.S. Senate debates the national energy policy, many are aware of the hype surrounding this academic construct. A Web search of "peak oil" turns up an array of experts who believe that a pending peak in world oil production will soon lead to global economic collapse.

In their rosier scenarios, experts predict sky-high gasoline prices that will crush oil-dependent economies like the United States. In their darker forecasts, they say people won't be able to obtain food, heat their homes or live securely during a period of global famine and resource wars.

Although talk of peak oil has rightfully focused global attention on the need to find alternatives to oil, the absolute peak of world oil production is an issue of supply and, in many ways, irrelevant. Unlike the 1973 oil embargo, in which high prices were the result of an OPEC-orchestrated supply cut back, high prices today are largely a reflection of demand-supply imbalance.

The global demand for conventional oil has, or will soon, outstrip the global capacity to supply conventional oil. Does that mean we are all doomed?

While the shock value of doomsday peak oil predictions is entertaining, it is far more important to recognize the reality of high global energy demand and begin to seek solutions — such as the energy policy being debated in the Senate — that could help mitigate the supply-demand imbalance. Solutions abound, but will take planning and coordinated investment.

Originally posted by the_oleneo
I suggest we should take C.E.R.A. report with a huge grain of salt.

They just completely ignore the growing demands of oil in China and India due to its higher population density on both countries (the higher the number of consumers, the greater the demands).

Originally posted by vor78
If these prices keep rising, demand is going to fall off a cliff pretty soon.