No Wolf At The Oil Door---CERA

Despite the left side of the political spectrum's incessant attacks against Big Oil [and its analogue, Western Industrial Civilization], Cambridge Energy Research Associates believes that supply will continue to meet or exceed demand, contrary to Chicken Little tree-huggers and scaremongers like Al Gore.

Here is what CERA's research says:

Oil and natural gas production capacity should surge by 25% to 110 million barrels per day by the year 2015 - the result of investments in new and unconventional petroleum sources like oil-sand deposits and oil shale, according to a study conducted by Cambridge Energy Research Associates (CERA).

The report flies in the face of most predictions of peaking oil output that is threatening economic stability.

But the research firm's forecast, if accurate, "would ease the current perception of taut supplies that have driven oil prices up 25% so far this year and 285% since the end of 2001," according to Investor's Business Daily.

While presently, there are only approximately 2 million barrels worth of spare crude capacity - considerably less than the amount available just 10 years ago - Cambridge predicts there will be some 12 million by 2010.

The group's report does acknowledge the probability of continued oil production declines in the U.S. and Europe's North Sea, but it anticipates considerable increases - especially among OPEC member nations.

Peter Jackson, CERA's director of oil industry activity, insisted that an increase in production has more than offset the aggregate disruption - thereby generating a net gain in spare production capacity.

"There is not really a supply problem in our view," said report co-author Jackson, according to the Boston Herald. "We see no reason why any reasonable demand level won't be met."

Note that the chief variable assuring increased production anticipates OPEC member nations behaving like rational economic actors. While this may be an optimistic take on the track record of OPEC, which tends to produce voluble unstable leaders of the Chavez or Ahmedinejad variety [or in Nigeria, of the kleptocratic variety], the Gulf producers led by Saudi Arabia should be able to take up a lot of whatever political premium that goes into risk factors on oil production increases.

If the Saudi royals lose control, however, the world oil picture goes into white noise mode and the 800-pound gorilla is at loose in the China Shop.