"The increased prices funds more technology for items like horizontal steerable drilling and make more sources economical to produces."
Supply has become increasingly inelastic. We have the same level of world supply we did 7 years ago despite the change in price. All that production from new technology isn't enough to replace the traditional plays that are going offline. They're more expensive than traditional recovery methods in terms of money, time, and capital invested and have a lower EROI. Higher prices make those sources marginally profitable for the producers. They don't make oil any more economical for consumers or from a macro perspective. And if there is no demand above a certain price level, then there is no increase in production.
Peak oil isn't a question of whether or not we have the technological capability to produce more. It's about whether we can increase our overall economic output enough to afford the increasing marginal costs of production, refinery, and distribution.
This chart obviously needs updating, but you can see what has happened to our economic output since 2000 in terms of being able to afford more oil.
We have the same level of world supply we did 7 years ago despite the change in price. Only if you are ignoring some sources of petroleum like Canadian Oil Sands. We have reached back up above 87 MMBPD. We were several million BPD less in 2004.
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=53&aid=1&cid=ww,&syid=2004&eyid=2011&freq=M&unit=TBPD
All that production from new technology isn't enough to replace the traditional plays that are going offline.
Your opinion, not mine and many (not all) agree with me. Some of those old resources will go through many decades of enhanced production methods. The recoverable reserves from a typical field rises with the price as well.
And if there is no demand above a certain price level, then there is no increase in production.
That is a different concept than supply not meeting demand, as you first discussed.
Peak oil isn't a question of whether or not we have the technological capability to produce more. It's about whether we can increase our overall economic output enough
Of course some day we will use less petroleum and more of another source. The stone age didn't end becase we ran out of stones.
I would like to see your same chart ploted in tons of gold. It only proves that some commodities rise faster than the average market. Not really a surprise.