When Is a Plateau a Peak?

Time to give a shout-out to Oilceo.blogspot.com, a great website for energy-related charts.

On Wednesday, Oilceo put up a great chart showing monthly global oil production.

Worldwide production was down in February to 84.330 million barrels per day, from a revised 84.368 mbpd in January. The drop is 38,000 bpd -- not much on a global basis when the world is using A Thousand Barrels a Second.

In Wednesday's Money and Markets, I expressed the opinion that we're very close to Peak Oil. That's when global oil production reaches its maximum. After that comes a (hopefully slow) decline.

Can a plateau be a peak? It certainly seems like oil production isn't going up. What if the next move is down ... way down?

And that got me to thinkin': Hurricane season is coming. It's likely that oil and gas production in the Gulf of Mexico will suffer. And remember, 23% of Gulf of Mexico oil production and 13% of its natural gas production is STILL shut in from last year. Some of that is never coming back.

And if the Gulf takes another hard hit this summer, there will be more knocked out for the next year ... or longer.

So maybe $70 per barrel oil is cheap.

Check out my new gold and energy blog at MoneyAndMarkets.com