Comments on: Matt Simmons Sees $300 Oil

By: Glen Hiemstra

Glen Hiemstra — Wed, 01 Jul 2009 17:21:02 +0000

Mark, I agree that the original $300bbl is still realistic, in the longer term – it may be a while yet, as in a decade or two. Cambridge Energy reported that in 2008 the cost per barrel to find a produce new oil had risen to over $56 – this cost increase alone suggests where the eventual price will go. Recall that in the beginning it cost 10 or 15 cents a barrel to find and produce oil, and “old oil” found before the mid-70’s cost perhaps a dollar or two to produce. Thanks for commenting.

By: Mark

Mark — Wed, 01 Jul 2009 15:30:09 +0000

$300bbl is still very real. Just because oil fell to $30-something earlier this year doesn’t mean he was wrong.

It’s impossible to predict all short-run exogenous shocks, but the long-term fundamental story for oil is intact.

By: Glen Hiemstra

Glen Hiemstra — Thu, 12 Feb 2009 23:38:53 +0000

To see what Simmons is saying these days, check out http://www.simmonsco-intl.com/research.aspx?Type=news

By: Glen Hiemstra

Glen Hiemstra — Mon, 09 Feb 2009 23:02:23 +0000

Anyone checked recently what Mr. Simmons is saying at the present time?

By: Rock

Rock — Mon, 09 Feb 2009 21:14:58 +0000

So much for the prediction!!! What a crack!

By: walter

walter — Mon, 26 May 2008 20:13:21 +0000

http://www.theoildrum.com has debunked CERA for years, pointing out that 8 times in a row their predictions have failed. It funny to note that while they still do not use the term Peak Oil, they have started to waiver and mention ‘above ground factors’. Whatever.

IEA reports are progressively getting darker. They’re now pointing to an ‘oil supply crunch’ for 2012 due to production gaps and will report later this year on a supply crisis.

Non-OPEC nations will grow at only 1% while demand exceeds 2.2%. Even if OPEC manages to take up the slack, the cutoff estimation is 2012 before that’s effectively done as well.

Given that the top 7 producers are not in the West and each is nationalized, it’s unlikely we’re going to get direct information (ie: Saudi)

The writing is on the wall and on your fuel gauge. Why not leave oil before oil leaves us? The Preparedness Principle is the hallmark of any government. Insist on it.

By: JdR

JdR — Tue, 08 Apr 2008 20:55:08 +0000

$55 a barrel?

Unfortunately, declining existing reserves are making it harder for increases in new production to create a net gain in overall global production. And with voracious demand from Asia, Russia, the Gulf States, etc.., things are bound to stay tight. Economies are having to adjust to the ever increasing price of crude oil. I doubt it will slip below $100 for very long – I don’t think I’ll ever see $60.00 oil again.

By: Michael Ferguson

Michael Ferguson — Wed, 12 Mar 2008 19:47:09 +0000

Google CERA and Daniel Yergin. He is more or less correct, but actually conservative for several reasons. To quote, “This is the fifth time that the world is said to be running out of oil,” says CERA Chairman Daniel Yergin. “Each time — whether it was the ‘gasoline famine’ at the end of WWI or the ‘permanent shortage’ of the 1970s — technology and the opening of new frontier areas has banished the specter of decline. There’s no reason to think that technology is finished this time.”

Additionally, this is primarily a China and India problem. Western Civilization is actually on a path to ‘energy independence.’

It is possible that oil could go very high in the short term, but bet on it trending toward $55 per barrel over the next twenty years.

By: Bill Harris

Bill Harris — Tue, 11 Mar 2008 14:06:55 +0000

Thanks, Glen. I just found Matt Simmons' collection of papers and speeches over the weekend; he appears to have some good material. Note the solution he suggests, as highlighted in my comment: "Travel less."