On the future price of oil, the best evidence of a steep upward trend came late last week when the International Energy Agency published a study into gasoline supplies in the US.

According to the IEA, US supplies are currently at a 16-year low for this time of the year. One result of the shortage is that pump prices have soared past $US3 a gallon.

Worse is expected as the summer “driving season” approaches, a time when people living on the left-hand side of the US drive across country to visit relatives on the right, and vice versa – producing a period of peak demand for petroleum products and peak prices.

Driving season, unfortunately also coincides with hurricane season, and The Slug doesn’t need to say what that can do to the US oil industry.

What’s happening in the US, despite what outside critics of that country might think, has an enormous effect on the overall world of oil, for a very simple reason; this one country consumes about 40% of the world’s gasoline.

The IEA, recognising the impact of US demand on the industry, effectively begged the Organisation of Petroleum Exporting Countries to quickly boost production.

In its report, the agency noted a substantial drawdown in US oil stocks, and noted the ongoing problems in dodgy parts of the world such as Nigeria.

Its one positive note about future supplies was a forecast that non-OPEC countries would lift production this year by around 1 million barrels a day.

The Slug has seen reports like this before where a technical group notes marginal ups and downs in supply and demand — but he always comes away with a feeling that everyone involved is missing the big picture – the one called peak oil.

Last week’s IEA report, interesting as it was, threw no new light on the fact that the world is struggling to achieve any substantial lift in overall oil output.

Discoveries remain elusive, or expensive, or both.

Arab states continue to dominate production, Russia is determined to use petroleum as a political weapon, and the rush to replace oil with synthetics or converted foodstuff such as corn and soy, is a band-aid fix to a very deep wound.

All this leads back to the opening comment about the oil price, which given the condition of US gasoline stocks, the imminent arrival of driving season, and the equally imminent advent of hurricane season, means that oil prices are indeed set for a bumper time.

The downside, as was also noted, is that high prices bring blame.

Fortunately, most of that blame will be allocated to the top end of town where ExxonMobil, Shell, Chevron et al can defend themselves in the US Congress or the British Parliament.

At the small end, it will be a case of going for a ride on the coat-tails of the majors, and enjoying a return of the peak oil debate.

As a final thought to this week’s ramble, The Slug wonders whether anything has actually changed from this time last year, or has the temperature simply moved up a notch in the slow boil known as peak oil.

Perhaps all that remains to be achieved now is for oil to hit the $US100 a barrel mark – a real possibility this year, and if not now, then next year because nothing is going to change as the game of finding and producing oil gets harder.