Whether you believe that peak oil is here or you believe that it’s fantasy, ultimately your opinion rests on whether the Saudis can pump more oil. For years, Saudi Arabia has been the swing oil producer, able to turn on its oil spigots when more was needed. Back in 1998, one reason oil went down to $12 a barrel was that Saudi Arabia wanted to flood the market and lower the price in order to teach OPEC cartel cheaters a lesson.
Now, with oil above $140 a barrel, the question is: does Saudi Arabia have any spare capacity left and if not, can it build some in quickly. The blog site “The Oil Drum” concentrates on oil and gives an excellent analysis of just that question.