Art Smith Believes in the Long-Term Bull Case for Oil

The outlook for oil seems to be brightening amid scant new reserve discoveries and declining reserves at the world’s large oil fields. “We believe we’re in a fundamentally positive market for oil in the 21st century,” says Art Smith, president of Triple Double Advisors, who anticipates oil moving back into the three-digit price range within three to five years. In this exclusive interview with The Energy Report, the 35-year veteran of oil analysis shares his knowledge of energy markets and reveals some of his own investment strategies.

AS: Oil has obviously got political and other issues that affect it; but the overall view that major inroads by alternative fuels will undermine the oil market is, I think, misplaced. In effect, oil at $100 a barrel is still not expensive compared with what it does for you. Would you like to walk 25 miles or so for a couple of bucks? A miracle elixir that’ll push your car down the road for 20-something miles for $3 (including taxes and other things) is still a great deal. We’re believers in the long-term bull case for oil. We’re in the Hubbert Camp, meaning that all the data we observe on reserve additions and size of wells that are drilled indicate that the law of diminishing returns is alive and well.

TER: So is the Hubbert Camp the Peak Oil Camp?

AS: It is one and the same. There’s a very good organization the Association for the Study of Peak Oil, Peakoil.net, that does a solid job of trying to provide a fact-based backdrop of the real data. When you boil it down, the key driver is that oil demand globally will continue to increase and with continuing depletion of discovered reserves, ultimately, it will dissipate or eat away at the 6 million barrels a day of apparent OPEC surplus that now exists.

International Business Times