Oil Supply & Demand Crossover

There seems to be a disagreement about whether high oil prices are caused by speculators or simple supply and demand. That speculation hasn't driven up other commodities, suggests speculation alone doesn't drive up prices. And there are no reports of hoarding or oversupplies of oil. But there's not so much oil that buyers can withhold buying buying to drive down prices.

It seems possible that we, as a planet, are now consuming exactly as much oil as we are producing. And it's clear that demand is increasing faster than supply. That is, we may be at the point in history where demand is about to surpass our supply. It's not Peak Oil, but it's the Oil Crossover point of supply and demand.

Peak Oil is a useful event to consider, but isn't valid for temporal predictions because it primarily considers supply. The predicted effects of Peak Oil are based on supply _and_ demand, but the predicted occurrence is based solely on supply. This doesn't make any sense at all.

The supply and demand crossover point is a more meaningful point in time. The Oil Crossover is the point in time when the predicted effects of Peak Oil will actually begin. The world doesn't need to have topped out its potential oil supply to experience global shortages. Rapidly increasing demand will do just fine. And, you may have noticed, demand is rising rather rapidly.

The danger is that policy makers are considering the right effects but at the wrong time. Policy makers use optimistic estimates of oil supply as an excuse to delay restraints on demand. Given this global unwillingness to restrain demand even slightly, it should be no surprise if it's rising demand that eventually brings us to the effects of peak oil, rather than shrinking supply. Nor should there be any surprise if we've finally reached the Oil Crossover.