We should expect to see OPEC blame anything but production capacity for the high prices. Even if they could raise production, which is doubtful, they probably would not.
Their best move is to conserve there oil. However, it should be interesting to see how it politically plays out when prices get out of control and the public gets really pissed. OPEC will most likely bluff until the end or until it’s so apparently obvious that they can’t raise production any significant amount.
Also, I would not expect any significant troop draw down in Iraq. We can’t leave that oil with just anybody. Supplies are so tight now any minor disruption can cause huge price spikes.
Interestingly, Shell’s CEO just published a letter that stated peak was going to be in 2015. While Exxon still maintains that it is 40 years away. Though as the data comes in it looks have been in 2006.
