The International Energy Agency (IEA) is forecasting world oil demand will set a new record next year when is smashes through 2008's pre-recession high --- and warning that the "era of cheap oil is over."
According to the IEA's latest Oil Market Report, published August 11, global demand will reach 86.6 million barrels per day in 2010, and then 87.9 million barrels per day in 2011, assuming a continuing global economic recovery. This means demand is set to pass the all-time high of 86.9 million barrels per day established in 2008 before the global economic downturn.
The figure has been given significance by those that say oil peaked midway through 2008. Peak oil refers to the time of maximum production --- the high point of the oil output bell chart, after which, as geologist M King Hubbert showed, output will diminish even though much oil remains to be extracted. If oil did peak at 86.9 million barrels per day, then demand would be expected to overtake supply early in 2011. (Personally, I don't believe oil has peaked --- but this will soon be put to the test.)
Another significant figure bandied around relates to oil's mid-2008 price spike: it traded at $147 a barrel in July of that year. People that believe oil peaked will tell you this was a simple matter of supply and demand, while Opec has all along blamed speculators for pushing the prices up. Another factor, as reported at the time by Reuters, was the then tension between Israel, the US and Iran, including Iranian missile tests and rumoured Israeli air force drills in Iranian airspace that "left the oil markets worried about a potential supply disruption."
There were clearly many market forces pushing oil prices up at the time --- so, unlike more accomplished peak oil writers, I don't see oil's passage through the 86.9 million-barrels-per-day threshold as guaranteeing triple digit figures. Anything is possible, of course, but to my mind the key figure to watch is Opec's spare capacity. This is the amount of mothballed production that can quickly come online to cushion against oil supply and demand shocks. Periods of tight capacity are associated with high oil prices; zero capacity indicates peak oil, or at least supply failing to keep up with demand.
As long as the Oil Conspiracy continues, these arch criminals will have a stranglehold on the world.