"The current out-of-control demand is not good for us," Ghazi Al-Rawi, head of private equity at Gulf One Investment Bank, said in a recent interview. "When you have this kind of demand, you're forced to supply beyond the optimal rate. That's not a positive thing."

Most urgently needed is energy conservation, especially in the United States, which now burns up a quarter of the oil sold to the world, said Saddad al-Husseini, the former head of production at state-owned Saudi Aramco.

"The crunch is already here. It's not five years down the road," Ghalib said. "There is no thought being given in the U.S. to raising gasoline taxes or increasing mileage on U.S. cars. In China, automobile use is skyrocketing."

Keeping prices high is the best way to meet demand over the next decade or two, said Leonardo Maugeri, an executive with the Italian energy company ENI. High prices give investors incentive to spend the billions needed to boost oil production and develop alternate fuels, Maugeri wrote in the current issue of Foreign Affairs.

The Point is people shouldnt have to change there life style just because the price of gas is high.

Labels: oil prices, Saudi Arabia

posted by Robert Rapier at 6:40 PM

Get ready for ever higher oil and gas prices. Without a swing producer who can step into the gap, any global hiccup is going to make the price of oil skyrocket.

Robert,

And when the crunch comes, you just know there will be people who will say, "Why didn't anyone tell us this could happen so we could get ready?"

Of course, there is always ethanol which once you start the system running, will magically churn out more energy than it consumes. ;-)

Regards,

Gary Dikkers

Gary,

I am going to write a post on Peak Oil tomorrow. I happened to be in Walmart today, and I was watching the faces of the shoppers, happily going about their routine. I was thinking "Almost all of these people are oblivious to the storm that's coming and will disrupt their lives". I am not a "doomer", but Peak Oil is going to affect everyone in a big way. Actually, it isn't going to even take Peak Oil to do it. I will get into that in my next essay.

Take care,

Robert