Peak Oil Production: What is it and when is it?

How can we tell when peak oil has been reached?

We can't tell by the price, either by the barrel or at the pump.

The price of oil in the US is kept artificially low.

1. Oil companies receive subsidies for exploration and drilling from the federal government.
2. Much of the oil currently being harvested comes from oil leases on federally owned land. The price of these leases is kept low in what amounts to another subsidy granted to the oil companies. The rationale for this quasi-subsidy is that the oil belongs to the nation and the government should not profit (very much) from its sale. This oil belongs to the nation, however, and not to the oil companies, who should pay full price, with the proceeds going to federal programs or income tax rebates.
3. The price of oil does not reflect the actual cost of burning the fuel in the air. This cost should include the cost of disease caused by inhalation of toxic chemicals as well as the cost to clean up the environment after oil spills. Note that it is not possible to entirely clean up the environment, since oil is persistent in the environment and does not readily degrade. The cost of global warming caused by the oil burned should also be included in the cost of the oil.
4. Tar sand deposits yield a low grade of petroleum, but it comes at a high cost because the deposits must be heated before it can be refined. In Canada, this is accomplished using natural gas that otherwise would go to waste since it is too expensive to remove from the site of its extraction.

Regardless of the price reductions caused by these factors, the price of oil, like temperature in a warming atmosphere, does not rise evenly at all times. The price of a barrel of oil rose to $140 during the last recession in 2008, but fell rapidly within 6 months to just $40 a barrel as a result of low demand.

A condition deemed critical to the price of oil is “Peak Oil”, when oil production has reached its highest level. Some estimates suggest that peak oil has already passed, possibly in 2014, but experts disagree both on when peak oil will be reached and what the consequences will be.
One of the conclusions reached by Matthew Simmons, who predicted that peak oil would come in 2007–2009, is that

"peaking is one of these fuzzy events that you only know clearly when you see it through a rear view mirror, and by then an alternate resolution is generally too late."

If the world’s top experts can’t enlighten us better than that, our own understandings about peak oil and what we should do to prepare for it must remain a matter of individual choice. This alone is clear: Peak oil is coming and it will bring great changes with it.
My sources for this post are

Peak oil - Wikipedia
US Cost to Produce Oil Is $36 a Barrel
Gas prices around the world 2016 | Statista