Depletion of Oil Reserves is Key Underlying Factor in Investment Outlook

Whether we’ve reached peak oil production worldwide or it is close, what is critical is that after the peak, oil production will decline. Henry Groppe, a long-time oil consultant and forecaster with Houston-based Groppe, Long and Littell, believes the decline worldwide will be about 5 per cent a year, or 4 million barrels of oil a day.

“To offset that, we have to find and bring on stream all of Saudi Arabia’s production approximately every two years. It can’t be done.” In effect, he says, the world has run out of cheap oil and prices have to remain high both to stimulate exploration and to restrain demand so that it will match up with what will be declining production.
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