Matthew Simmons Projects $100 bbl Oil By 2010 At Depletion Conference

[hatrack]

EDINBURGH - "Fresh oil shocks may send prices over $100 a barrel and trigger worldwide recession by the end of the decade, a conference on the theory that oil supplies have almost peaked heard on Monday. Speakers said oil production by major companies is set to peak in coming years while the huge reserves of OPEC producers are overstated, meaning declining output will not be able to meet rising world demand.

"The current tightness in global oil markets is likely to be a permanent feature as the world nears peak output," said Matthew Simmons, chairman of energy investment group Simmons & Company International. "Prices are going to go way higher -- $100 isn't very expensive," he told Reuters on the sidelines of the Peak Oil UK conference in Edinburgh.

EDIT

Oil's surge this year to record peaks above $58 a barrel has convinced some analysts that prices have moved structurally higher, as rising demand led by China strains supplies.

The world's top exporter Saudi Arabia said last week it is ready to increase its output capacity to 15 million barrels per day, from around 11 million now, and sustain that level for 50 years. "There's no proof," said Simmons. "Those resisting data transparency have something to hide. New reporting standards need to be made mandatory," he said, calling for standardised data on oil field production and third party verification of oil reserves."

EDIT

http://www.planetark.com/dailynewsstory.cfm/newsid/30549/story.htm

[BlueEyedSon]

1. He's a pretty smart guy

[madrchsod]

2. interesting

the oil industries engineers are projecting decent supplies in two years with fields off africa and south american coming on line. the problem they are saying is that it will not be cheap to drill and recover.to bad we are spending hundreds of billions on a war instead of redesign and retrofitting our countries energy use

[phantom power]

3. It's a textbook "peak oil" scenario.

It's not that we've run out, it's that the last half is much more expensive to extract than the first half.

Throw in the new demand from China, India, etc, and you get their "structural" changes. The old economics simply don't apply. The new oil economy will be driven by demand that exceeds supply, not the other way around.