http://fromthewilderness.com/free/ww3/042106_world_stories.shtml#1

Oil Prices Show No Sign of Slowing

Tight Supplies, Capacity Spark Talk That Crude Could Reach $80 a Barrel

.......The fundamental trouble is that the global energy system for the past three years has been operating close to its ability to pump and refine crude. And with demand continuing to grow, output sagging in troubled oil regions and another hurricane season approaching, the industry has failed to restore a large cushion of spare capacity.

One big laggard: the U.S. oil patch. More than half a year after the 2005 hurricanes, almost 23% of oil output in the U.S. Gulf is still shut down -- about 340,000 barrels a day.

And production increases that had been expected in other oil-rich countries aren't panning out. Russian output growth sped up sharply earlier in this decade but has slowed to a crawl. A small rebel group in Nigeria has caused a supply shortfall that is greater than a recent capacity expansion by Saudi Arabia. Politically troubled export powerhouses Iraq, Iran and Venezuela are having problems keeping up supply levels.

Officials of the Organization of Petroleum Exporting Countries have acknowledged there isn't much they can do right now to boost supply. Led by the Saudis, the cartel is pumping close to flat out. "OPEC looks in pretty bad shape now," Mr. Halff says........

"At some point in time we're going to reach a limit, and we will see a real impact of increased oil prices on our economic activity," U.S. Energy Secretary Samuel Bodman told the Society of Automotive Engineers World Congress last week. "Whether $95 [a barrel] or something north of that, I don't know. I can tell you I'm worried about anything above the current levels."