Matthew Simmons is chairman and CEO of Simmons and Company, his own investment bank that services oil companies. He is also an expert on peak oil. He spoke a few weeks ago at the 2009 international conference of the Association for the Study of Peak Oil and Gas (ASPO) in Denver.
The content of his talk was a bit of a worry. Whilst the global financial crisis has bought us some time, the problems haven't gone away. By his measures we have ALREADY had peak oil, and global production of eighty-five million barrels a day will gradually fall from here on.
Future supplies have never been more uncertain. Simmons expects Mexico to stop exporting within a few years. Venezuela's output is falling. Nigeria is unstable, and Iraq is struggling to rebuild their industry. The US already imports 65% of its oil. By 2025, this is likely to be more like 92%.
With supply struggling, and demand set to accelerate, Simmons expects prices to keep heading upwards. He expects oil to hit $200 a barrel by next year, and thinks oil at $700 a barrel is not unrealistic.
Time to dust off your bicycle.
RRS Price at posting:
3.6¢ Sentiment: Buy Disclosure: Held
