One might assume that the Intertubes are hummin’ over the news that the IEA is doing their own bottom-up analysis of the world’s oil fields, with the likely result being a dramatically lowered projection of future oil supply. And one would be right.

Here’s a sampling of what’s being said, with some brief commentary from your host:

Who knew? What did they Know?:

Who knew? What did they know? And when did they know it? No, I am not talking about the Soviet style show trial in Washington with oil company executives being grilled. What I am talking about is who knew about the upcoming adjustments to the International Energy Agency’s long term supply forecast.

It’s obvious, based on the market’s quick dramatic move from backwardation to contango over the last two weeks, that someone had a very good idea that the IEA was about to make a major announcement. This week I have been asking why the market, in just a few short weeks, had this sudden epiphany that the world was running out of oil. I have been asking why oil in the deferred contracts had an almost unprecedented gain of almost $8 a barrel on the front month contracts in just a few weeks. Now I think we all know why. Obviously some one knew about what is being reported on the front page of today’s Wall Street Journal.

IEA worried about oil supplies, prepares forecast:

A leading global energy monitor fears there may not be enough oil to slake the world’s thirst — and is preparing a landmark forecast that could reverberate through the global economy even as major companies announce fuel-related cutbacks.

The International Energy Agency is studying depletion rates at about 400 oil fields in a first-of-its-kind study of world oil supply, chief economist Fatih Birol said.

“We are entering a new world energy order, ” Birol told The Associated Press.

Market analysts call the Paris-based IEA the world’s most reliable independent source of oil information and welcomed its decision to undertake a deep study of oil supplies.

But the IEA’s new forecasts are likely to further upset markets. Oil prices hit an all-time high Thursday above $135 a barrel before falling back.

Less oil would mean even higher prices for everything from gasoline to food. Already, airlines squeezed by jet fuel costs are bleeding profits and predicting cutbacks and industry upheaval. Ford Motor Co. said Thursday it was cutting production of gas-guzzling sport utility vehicles and forecast more rough times ahead.

Economic Toll Mounts From High Oil Prices:

Some investors reacted to a report on Thursday in The Wall Street Journal that the International Energy Agency, an Paris-based policy advisory group for industrialized countries, was concerned about a reduction in the long-term world supply of crude oil.

But the agency’s chief economist said in an interview that the study’s results were still inconclusive. “We are going to revise our oil supply prospects,” said Fatih Birol, the economist. “We don’t know the results yet.”

And several oil analysts dismissed the importance of the current anxieties affecting the market.

“Concerns about future supply — that’s nothing new, it’s been there for four years,” said Antoine Halff, an analyst at Newedge.

Some experts expressed frustration that investors were only focusing on alarmist reports about declining supplies in a few areas and failed to consider that higher prices would eventually tamper demand and attract new production from places like Brazil.

IEA says oil output near capacity:

The International Energy Agency says operating oil fields around the globe are pumping as much black gold as they can. Yet, there are numerous fields untapped. John Dimsdale reports on why oil companies haven’t drilled into them.

[follow link for audio story]

Oil Rises Above $135 as OPEC Says It’s Powerless to Stop Rally:

The Wall Street Journal reported earlier that the International Energy Agency will lower its 2030 supply projection to 100 million barrels a day from 116 million. The Paris-based IEA was founded in 1974 in response to the Arab oil embargo.

“We are trying to get a better understanding of depletion rates and expectations of productivity,” Bill Ramsey, the agency’s deputy executive director, said in a telephone interview. “There is growing awareness that raising world output is a problem,” and it is “too early” to give any estimates, he said.

Chilling warning on oil supply:

The world’s leading energy authority warned yesterday that global oil supplies may fall well short of booming demand within the next 20 years.

The International Energy Agency’s chilling assessment has been revealed as oil prices burst through $US135 a barrel for the first time, after a sharp drop in US inventories.

…

The Paris-based agency’s gloomy outlook comes just days after Goldman Sachs JBWere analysts predicted that oil prices would surpass $US140 this year and could average $US200 in 2009.

And it is likely to be seized on by investors, who have already pushed oil prices to double the levels they were a year ago.

Oil futures end lower to mark first loss in a week:

The Wall Street Journal reported Thursday that the IEA is attempting to assess the condition of the world’s top 400 oil fields. Its findings won’t be released until November, but it is clear that future crude supplies could be far tighter than previously thought, the report said.

The IEA has predicted previously that supplies of crude and other liquid fuels will keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently, according to the report.

The agency now is concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades, the Journal reported.

My two related posts were about the contango phenomenon (The oil market falls into line, perfectly) and the IEA story (Deciphering the oil market).

I’m still convinced that the IEA report will be a major, perhaps unprecedented, turning point in our mass recognition of what “you can’t use a non-renewable resource forever” means in the context of something as vital to modern economies as oil. You can argue endlessly and truthfully that we should have figured out decades ago that peak oil was bearing down on us like a runaway train, and it’s our own fault we’re in this mess because so many of us ignored the facts and the basic logic of the situation. In my opinion that’s as undeniable as peak oil is unsettling.

Looking forward, I expect to see the oil market and closely linked industries, most notably airlines and cars, continue their (and our) roller coaster ride in response to news out of OPEC and this already famous IEA report, even without the added “stimulus” of oil production shutdowns from above ground events. Even worse, I expect to see US politicians committing serial acts of idiocy as they pander to voters feeling genuine pain from gasoline prices and overall inflation, even as the deniers work overtime to try to convince us that “there’s plenty of oil” and, above all, that “the oil companies are just screwing us again”.

As I’ve observed here from time to time, our energy future is going to be a lot of things, but “dull” isn’t on the list.