Oil Sands and Related Stocks Message Board

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Gold/Mining/Energy : Oil Sands and Related Stocks

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From: james flannigan	5/11/2008 1:35:13 PM
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Matt Simmons said a few weeks ago "we are not entering peak oil,its here right now in your front room". While I think there are speculators running up the price $13 per brl in the past two weeks,Simmons lays out the case the the high oil prices are causing demand to feed on its self because the exporters of oil have a lot more money coming in to buy goods and services. That in turn creates more energy demand. One would think that high oil prices would trigger demand destruction.Not so says Simmons. He then shows how the world oil fields peak much faster and the enter rapid decline due to such high prices so producers pump all they can during high prices.That in turn causes faster decline rates for fields. Simmons is very smart and in fact his DD is unmatched on the subject of peak oil.Simmons has been thought to be over stating and touting in 2005 the oil crisis we are now in.Well my answer to that is why has oil gone from $40 in 05 to $126 in 08 if we do not have an oil crisis? The sad part is he sees the financial markets in crisis and war coming for the remaining earths oil reserves. Taking a look at the Dow over the past 8 yrs with little or no long term gains. One would have to ask,is the Dow confirming the oil crisis? If so Simmons says financial markets will collapse when the markets see that growth in world GDP can not grow if oil "the blood of world GDP growth" is in short supply. Things are going to get a lot worse if Simmons is right.I think its foolish to bet against Simmons.On the bright side owners of the worlds largest reserves ,the oil sands ,are going to be the toll collectors on the oil bridge. I could hardly be more happy buying the most valuable land on the planet for pennies on the dollar even though oil sand stocks have had some nice gains in the past few weeks. Conclusion: If Simmons proves to be right on the oil shortage, oil sand stocks are still dirt cheap... James

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