“Whether we are already at the peak in world oil production remains to be seen, but it is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity,” he wrote. “Oil supply will hardly grow at all, with average production between now and 2012 rising by barely more than a million barrels per day.”

Similar forecasts emerged yesterday, and now OPEC president Chakib Khelil has chimed in with his own $200 call. “Mr Khelil blamed record oil prices on the weak dollar and global political insecurity,” reports the Financial Times. Quoted in El Moudjahid, the government newspaper of Khelil’s home country of Algeria, he said, “I don’t think that an increase in production would help lower prices, because there is a balance between supply and demand and the stocks of gasoline in the
United States have recorded a surplus and are at their highest level for five years. The prices are high due to the recession in the United States and the economic crisis, which has touched several countries, a situation that has an effect on the value
of the dollar. Each time the dollar falls 1 per cent, the price of the barrel rises by $4 and of course vice versa.”

Any comment, Mr. Strong-Dollar Hank Paulson? Hmm, didn’t think so.

Meanwhile, the New York Times, citing Rubin’s forecast among others, points out that non-OPEC oil production is flat-lining and OPEC production likely can’t pick up the slack. Not exactly news to those of us who’ve been paying attention for a while, but it’s worth noting any time awareness spreads.

According to the paper: “Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar.”

Peak Oil expert Byron King was ahead of the curve on the role of the dollar in pushing up oil prices. Last week Byron wrote this in his Energy and Oil blog. “A declining dollar hurts all Americans, and every dollar holder in the world. Call it ‘Battered-Dollar Syndrome.’ A declining dollar works against long-term investment. The late economist Kurt Richebacher used to say, ‘A declining currency destroys capital.’ Still, somebody must think it is OK to devalue the dollar, because that is one of the key drivers behind the rising price for oil.

“The world oil supply has become very tight. Demand is rising. The price for oil would ordinarily be going up to clear the market. But with all the ‘extra’ money creation coming out of the US Fed, oil prices are going up even faster. And I should add that just the expectation of loose money is also inflating the price of oil. There is probably $15-20 worth of ’speculation premium’ built into every barrel.