Speaking at a Senate committee hearing, legendary Texas oilman T. Boone Pickens said that world crude oil production has topped out.
He noted that the United States is consuming "21 million barrels of the 85 million and producing about 7 of the 21, so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand."
And when Mr. Pickens speaks about energy, the world listens. His ability to read markets has vaulted him into the ranks of the world's wealthiest people. His hedge fund, BP Capital, manages more than $4 billion in assets.
By saying that oil has "peaked," Pickens means that right now, the world is producing the most oil it will ever produce. Soon, production will enter into a terminal decline, and prices will continue to go up.