Cairn says peak oil fears may have fuelled rally

LONDON (Reuters) – Oil’s spurt to a record above $135 last month from around $100 at the start of 2008 may have been influenced by a growing feeling that oil supplies might be peaking, the head of oil explorer Cairn Energy said.

Cairn’s Chief Executive Bill Gammell told the Reuters Global Energy Summit on Friday that there was growing awareness in the market about “peak oil”, a theory which says that global production is near an apex after which it will decline sharply.


“The move from $100 to $130 was actually a period when people started to look at and wonder more a bit about the peak oil theory,” Gammell said.

The theory of peak oil was first suggested by geoscientist Marion King Hubbert, who in 1956 predicted U.S. oil production would peak between 1965 and 1970.

More recently, Matthew Simmons, the chairman of a Houston-based energy-focused investment bank, said in late 2006 that the peak may have occurred in December 2005.

Reuters