Originally Posted by ADL Colin

Exactly. The point isn't supply and demand of oil but rather the demand for oil futures. The demand for oil itself is only marginally higher; increasing a few percent per year. Whether rightly or wrong there has been a huge change in perception about future supply and demand. When you have the well-respected Matthew Simmons and Boone Pickens making the strong "peak oil" statements daily on CNBC and in the the press, well it has an enormous influence on the market - whether we are as close to the peak as they claim or not. Simmons book (2005?) really called into question whether the Saudis are capable of the production increases they claim.

The largest oil companies in the world are not the public and well known Exxon, Conoco, BP etc but rather they are sovereign companies such as Saudi Aramco, Petroleos Mexicanos, Petroleos de Venezuela and China National.