Carpe Peak Oil

Rahm Emanuel

Matt Simmons, energy analyst and author of Twilight in the Desert, recently told Reuters,

“We are 3, 6, maybe 9 months away from a price shock… These prices now are dangerously low. The lower prices fall, the less oil will be produced and the greater the chance of an oil spike…. [And] unless oil demand falls by 10 or 15% per annum, which it is not going to do, then we don’t need to wait for oil demand to come back before we have a supply crunch.”

In this scenario, low oil prices will continue to take oil fields out of production and reduce exploration. Once prices recover, companies will have trouble gearing back up due to the credit crunch, resulting in production-increase delays.

This is on no one