Oil supply 'cannot match demand'

Signs of peak oil:

OPEc cartel president Purnomo Yusgianto said member states were already beong allowed to produce well over their quotas, yet oil prices continue to climb.

Major oil producing countries are adding an extra 2 million barrels a day without any noticeable effect on prices.

The IEA has raised its forecast for 2004 global oil demand growth to 1.95 million barrels per day, despite generally slow growth in developed economies.

But not all of this extra demand is because of consumption. Major countries are displaying another typical symptom of shortages--they are hording supplies of oil.

The US strategic petroleum reserve has been a particularly active buyer, and governments such as China and India have followed suit.

So far higher gas prices have not dampened demand in the U.S. as the economic recovery speeds up, so for now prices are likely to continue to rise.