Oil hit $104/barrel today. This comes right after OPEC met to talk their usual talk about how much oil they want to pump out of the ground. OPEC is not going to increase production and they claim it is because “supplies are sufficient”. They’re blaming “speculators” for driving up the cost.

What a load of crap

I’m going to call their bluff: OPEC isn’t producing more oil because they can’t. World oil production has peaked. Don’t just take my word for it, have a look at the US oil inventories. We’re presently humming along at a 14-day supply of oil (don’t believe the “Days of Supply” graph on the EIA website—do the math yourself: 14 days!).

Last week we were down 20.5 million barrels/day from this time last year. This week we’re down “only” 18.5 million barrels/day… HOWEVER, we just had a major refinery go up in flames so you’d expect oil inventories to be UP and gas inventories to go DOWN. Essentially, that refinery fire is making the oil inventories look better than they would be otherwise.

Even President Bush (long time oil industry apologist) had this to say (from the NYT article):

As a sign of growing impatience with oil producers, President Bush said on Tuesday that it would be a “mistake” for OPEC not to increase supplies. As the oil group was meeting in Vienna, the president repeated his assault on Wednesday, saying it was “obvious” that demand was stripping supplies, and pushing up prices.

This could very well be the day that historians determine as the start of peak oil economic collapse.