Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Further Gold Price Pressure as the USDX Is About to Rally - 23rd Oct 20
Nasdaq Retests 11,735 Support - 23rd Oct 20
America’s Political and Financial Institutions Are Broken - 23rd Oct 20
Sayonara U.S.A. - 23rd Oct 20
Economic Contractions Overshadow ASEAN-6 Recovery - 23rd Oct 20
Doji Clusters Show Clear Support Ranges for Stock Market S&P500 Index - 23rd Oct 20
Silver Market - 22nd Oct 20
Goldman Sachs Likes Silver; Trump Wants Even More Stimulus - 22nd Oct 20
Hacking Wall Street to Close the Wealth Gap - 22nd Oct 20
Natural Gas/UNG Stepping GAP Patterns Suggest Pending Upside Breakout - 22nd Oct 20 -
NVIDIA CANCELS RTX 3070 16b RTX 3080 20gb GPU's Due to GDDR6X Memory Supply Issues - 22nd Oct 20
Zafira B Leaking Water Under Car - 22nd Oct 20
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

They Died Before the Oil Ran Out

Commodities / Crude Oil Aug 17, 2010 - 11:49 AM GMT

By: OilPrice_Com

Commodities

Best Financial Markets Analysis ArticleThere is an open secret in the oil industry that dare not speak its name: peak oil.

Well, two did speak its name and gained no acclaim for it. One, M. King Hubbert, died years ago. The other and the most controversial, Matthew Simmons, died at his Maine summer home Aug. 8.


The peak oil idea is simple: Oil is a finite commodity, and one day we are going to use up all of it.

Hubbert, a geologist, began speculating on the effects of the gradual decline in worldwide production in the 1950s. He expressed this in a simple graph, which became known as “Hubbert’s pimple.”

He tended to draw the graph freehand, and it looked more like a Rubenesque breast than a pimple. It was so simple that he drew it over and over again to illustrate his points for journalists and politicians. Later, he would draw lines through the pimple to demonstrate where we had been and where we were going, based on the then-known reserves and rate of depletion.

For his scholarship, Hubbert was eased out at Shell Oil Company in 1964. He took a job with the U.S. Geological Survey and continued his speculative research--until he was thrust into national prominence by the oil crisis of the 1970s.

Simmons, in contrast, was a much more apocalyptic predictor than Hubbert. His illustration is a stark tower of a graph, more like the Empire State Building than the gentle curve of a woman’s breast. He saw all the oil on Earth savagely used up in just two centuries, the 20th and the 21st , resulting in international catastrophe probably by 2040.

In one television interview, Simmons sounded like a survivalist. He said he was stocking his home with all kinds of supplies in order to survive the food and fuel shortages which would accompany the decline in oil availability, and the impending international chaos and hostility.

In the energy industry, which has a definite aversion to bad news and hard questions, Simmons was an agent provocateur and an effective one; effective because he was of the industry not outside it.

Simmons was an oil man and his firm, Simmons & Company International, was founded in Houston in 1974. It grew to be one of the world’s most influential energy investment banks, with offices in Houston, London, Aberdeen, Scotland and Dubai, United Arab Emirates. It has been responsible for hundreds of billions of dollars of merger and acquisition activity.

The industry loved the deals Simmons made possible, but not his talk of doom and chaos.

In particular, Simmons distressed Saudi Arabia by analyzing production data and detailing what he concluded was a decline in the rate of drawdown on the Ghawar oil field, the world’s largest. This was the thrust of his book, “Twilight in the Desert,” and it incensed the Saudis and their oil company, Aramco. It also forced them to increase their field management efforts and make their operations more transparent.

Whereas Hubbert, who died in 1989, was a gentle seer of trouble ahead, Simmons was the knock on the door before dawn.

Ultimately both have been betrayed by time and, in Hubbert’s case, technology. But their arguments have not been invalidated.

Hubbert did not foresee the enormous technological advances in exploration and drilling, including greater depths, horizontal wells and 3D seismic.

Simmons saw all these things and concluded nonetheless that world demand for oil is so high that the end is near. He believed that once global production peaked and the 86 million barrels a day now consumed cannot be provided, oil will rise in price steadily to $200 a barrel and going as high as $500 a barrel as chaos and fear spread.

In recent months, Simmons became even more controversial. Correctly, he estimated that BP spillage in the Gulf of Mexico was many times what the company had first claimed and was almost spot on. But he also said that BP would be forced into bankruptcy and that a nuclear device was the only way to stop the leak. BP responded by ending its relationship with Simmons’ bank. And Simmons ended his lingering involvement with it, as well.

Simmons was a perfect storm of a man, raging against the myths and self-satisfaction of the oil industry. In his absence, there will be a certain quietude in the petroleum clubs of Houston, Denver and Edmonton, Canada and elsewhere.

But in their hearts, they fear he was right.

Source: http://oilprice.com/Energy/Crude-Oil/They-Died-Before-the-Oil-Ran-Out.html

By Llewellyn King in Washington DC for OilPrice.com who offer detailed analysis on Crude oil, Natural Gas, Geopolitics, Gold and most other Commodities. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. To find out more visit their website at: http://www.oilprice.com

© 2010 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules