First, go have a look at this page. This is the full list of futures for oil, ie how much it costs you today to purchase a barrel of oil to be delivered at the date you want in the future.

While spot prices jumped by $2 yesterday, the longest-dated futures jumped by a whopping $9 (with more to come today). This is HUGE.

And this is how this is described in the Financial times this morning:

Shortage fears push oil futures near $140

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel on Tuesday, further stoking inflationary pressures in the global economy.

Investors rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. The spot price hit a record $129.60 a barrel.

Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints.

Neil McMahon, of Sanford Bernstein, said: "Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices."

Shortage is in big block letters on the front page of the paper this morning, and peak oil features prominently in the article.

It's about time "peak oil" made it to the frontpage of our business papers. Yesterday, the FT still had a positive spin on things, in an article saying that the US decline in foreign oil dependency is already becoming more visible, with imports making up 57.9 per cent in the first three months of this year, down from 58.2 last year. In other words, market forces are doing their job, nothing to worry about, move on.

Today's tone is quite different - maybe it's the $9 per barrel jump in one day, and the fact that it's long dated prices that are increasing more than short-dated ones, ie worries are now about future supplies, not current supplies, a change whose significance is hard to understate.

For politicians, the only heat they are getting is from fishermen and truckers who are being squeezed by higher costs (you'd expect that with such an across the board price increase, competition would not be impaired, and higer costs would be passed on to consumers, but the market power of big retailers still seems to limit that to some extent for now, so the problem remains localised within the fuel-intensive sectors rather than with the end-user consumers in the form of inflation), and from angry communters who are unhappy about spending more on gas.

And thus you get this, which deserves its very own exhibit in the future Museum of Grotesque Things done by US Politicians in the Bush Years:

U.S. House passes bill to sue OPEC over oil prices

WASHINGTON (Reuters) - The U.S. House of Representatives overwhelmingly approved legislation Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

(...)

"This bill guarantees that oil prices will reflect supply and demand economic rules -- instead of wildly speculative and perhaps illegal activities," said Democratic Rep. Steve Kagen of Wisconsin, who sponsored the legislation.

This may sound mostly pointless and silly, but it is also a stunning display of weakness by the US political class, which would rather remain in denial about the reality of the energy world, and look for scapegoats, than address problems, and it is also a pretty strong sign that they are followed in this respect by their electorate, which is all too willing to take such posturing seriously (or at least tolerate it) instead of seeing it as a sign of utmost contempt for it: Americans are not willing to face reality, US politicians pander to that, and nothing gets done.

:: ::

Not to worry, prices will increase until they cause new consumption patterns, for gas itself and for all products that embed oil, because demand WILL shrink in the face of stagnating supply and continued demand growth from oil producing countries themselves and emerging economies.

One thing which now appears obvious is that the current "boiling frog" price increases (ie, slowly and without a big shock) are unlikely to lead to shortages or rationing in the short term, because that's not where the problem is - the big problem is with respect to future supplies.

Of course, the good news of sorts is that, if the problem is access to oil or energy a few years out, then we have time to actually do something about it. Not much, but some. Awareness is key to that, but it has to go through a thick fog of denial, starting with Congress and those that vote for its blustering members.