Unstable Oil Production and Prices: The New Normal

"How Peak Oil Explains the Past Five Years" is one of the best recent articles I've come across that examines the status of world oil production. It is worth a careful read, Instead of  a sharp peak and precipitous decline that the doom-mongers pitch, Phil Hart believes we have been in undulating plateau that shows a complex relation between production and prices:

My view now is that resources in the ground may be sufficient to allow for global capacity to continue on this ‘undulating plateau’ a little longer, or for decline rates to at least be moderate in the short-term. But the geopolitics of the major oil producers, and Iraq in particular, could mean that actual production capacity falls (just a little) short of what resources in the ground might otherwise sustain. But it is only a hypothetical world where resource limits do not interact with geopolitics and such above-ground factors only become a concern when you're near the below-the-ground limits.

 I suggest that rising and falling production with complex feedback with prices, politics and the economy is going to be the "New Normal" for the upcoming decade. It actually provides breathing room to get stuff done, if we can get the knuckledragging and pandering strains of political thought out of the way.
I suggest that rising and falling production with complex feedback with prices, politics and the economy is going to be the "New Normal" for the upcoming decade. It actually provides breathing room to get stuff done, if we can get the knuckledraggers and pandering strains of political thought out of the way. Of course it doesn't help when you nonsense like this being pushed by a delusional right-wing economist who is often used by Kudlow to justify some of the nonsense he spouts . As geolosist Kenneth Deffeyes once said, "The economists all think that if you show up at the cashier's cage with enough currency, God will put more oil in ground."

UPDATE: OPEC surprisingly fails to boost oil production.  Could be a couple things going on here. Political instabilty in the Middle East is effecting some governments abilities to control production (seems unlikely for the big producers) or maybe some like Saudi Arabia are at a resource peak and cannot easily raise production.