Why is oil getting so expensive?

It is a ritual: With every new oil price record the press is storming out and presenting an ever increasing number of reasons. From unrest in Nigeria, over the violence in the middle east in general to tensions between Turkey and the Kurds.
That naturally confuses. But as always journalists often don't tend to scratch under the surface.

If one ignores the daily noise and digs deeper into the material an other, very important explanation arises.
Other than geopolitical events that don't influence physical production one reason for high oil prices, if not the reason could very well an imbalance of supply and demand.

As the demand is growing rapidly due to economic growth almost everywhere in the world the supply, the oil production, seems to tend sideways.
And it tends sideways for quite a while. Even, when with very high oil prices every incentive to ramp up production is given.

The concept that captures this all is known as Peak Oil. Peak Oil basically says that global oil production follows a bell shape curve. And a curve of this shape has naturally a peak, a point after which oil supply will ultimately decline.
The concept itself has been proved as true since peaks were observed in a number of countries. It is also a coercive result of basic logic, since the ammount of oil in the world is limited.

The question is: Is this Peak Oil? Are we at the tipping point?
If true it will certainly have the consequence of very volatile and high energy prices as "weak" consumers will be priced out of the market.
It also means a tremendous amount of power in the hand of those who own and produce oil.

An overwhelming amount of data points to a peak that already happened or will happen in a very short period of time.
To quickly summarize some facts:

- The massive increase of rigs in Saudi Arabia with slightly declining production

- The basic tone of IEA, switching from passive to agressively warning

- Efforts from the Chinese government to seize control of oil fields overseas

- Massively declining production (10-20%) in the North Sea and the Gulf of Mexico

- Rapid maturing of the biggest oil fields

- Very little new discoveries in regions far away from human population centres

For further research, The Oil Drum, presents a very good collection of articles.

Odds:

Peak Oil is here: 35-65%
Press talks about Peak Oil soon: 75-85%
Average oil price of 100$+ in 2008: 40-60%