Global crude oil reserves are on the rise, even though consumption is increasing. How can this be true for a finite resource? Proved oil reserves are the estimated volume of oil that exists in underground pools and can be extracted under current economic and technological conditions. It then makes sense that proved reserves would increase with new technology and higher prices.
Today’s higher prices are not indicative of dwindling global supplies. There are multiple reasons for the rise in gas prices as previously discussed. It is likely that oil production will peak at some point in time. That point, however, cannot be extrapolated by examining existing reserves and global consumption, not even if adjusted for population. What is missing from much of the peak oil analysis is basic economics.
As demonstrated in the chart, proved reserves have increased with higher oil prices and new technology. Higher prices and profits motivate increased research and development. Purchasing behavior also responds to changes in price and technology. Higher gas prices encourage conservation and a shift to substitute products. The peak of oil production will depend upon how purchasers respond to changing prices for oil, gas, and substitute products.