A recent Economist article highlights some of the questions over whether we’re experiencing peak oil now or not. There have been a number of stories recently alleging that oil prices are artificially high right now in part because there are vast quantities of crude sitting on ships offshore. Another issue is limited refinery capacity. According to the Economist story, these factors are linked:

At the moment, diesel is in short supply and there is a glut of fuel oil. That makes processing heavy oil unprofitable for some refineries, since the gains from diesel are outweighed by losses on fuel oil. As refineries turn instead to lighter grades, it pushes their prices yet higher. The discount on heavier crudes has risen to record levels. But even then, points out Ed Morse, of Lehman Brothers, another investment bank, Iran is having trouble selling the stuff. It is storing huge quantities of unsold oil on tankers moored off its coast.

Fuel subsidies, particularly in Asia, are keeping demand up. Some commentators consider the incredible shrinking margin at North American refiners to act as a subsidy on our consumption — which large oil companies, who own both production and refiners, can afford to extend.

And then there’s the issue of what’s happening to demand. Growth in fuel consumption in OECD countries has been dropping since 2004. Sure, demand in emerging economies is growing, but with some of these countries scrapping or reducing their fuel subsidies, don’t expect it to continue to increase at the same pace. And that argument about China having an insatiable appetite for all commodities because of its race toward the Olympics will soon be stale-dated:

China’s growing thirst for oil is often put forward as one of the main factors behind today’s higher oil prices. Demand for diesel there, for example, rose by over 9% in the year to April. But Mr Morse argues that such growth might not last. The government has ordered oil firms to increase their stocks of fuel by 50% to be sure there are no embarrassing shortages during the Olympics. It is also planning to run some power plants near Beijing on diesel rather than coal, in an attempt to reduce pollution during the games. These measures are helping to boost China’s demand for diesel, but the effect will be transitory.

Changes in consumption are underway. Those changes will show up in demand statistics in the not-so-distant future. The question of whether the price of oil is really linked to supply or demand, however, will remain.