A lot of noise is being made about Wikileaks info that says the US thinks the Saudi’s are overstating their Proven Reserves by about 40%.
This isn’t news. It has been known for years. In the Mid-80’s the Arab producers decided, after the American and other foreign experts had been shown the door, they had more oil in the ground than was previously known.
Without having found any new fields, without any advancement in technology, some of the Arab oil producers announced increases in Proven Reserves of over 100%. For some time, Wall Street referred to these fictitious numbers as “Paper Barrels” and ignored them. But as time passed, they began to be accepted in the mainstream.
This is one of the major points of oilman Matt Simmons’ book – Twilight in the Desert. He was in the business back in the early 80’s (and well before). He knew the numbers were fictitious and called for independent verification of the reserves.
These charts should eliminate any comfort you might have felt thinking Saudi Arabia and the other Arab nations would be able to keep oil flowing for decades.
in Thousand Million Barrels, Source: BP’s Statistical Review Of World Energy 2010
Peak Oil – Not Just a Myth
Peak Oil is not when we run out of oil, it is when fields hit their “peak” and production declines. The US has been in decline for decades. Many other major producers have been in decline for years.
Most concerning is the OECD has been in decline for a decade and this means the Developed World is relying more and more on the Developing, and less friendly and stable, countries for its oil.
All the information below is from BP’s Statistical Review of World Energy 2010. It shows that Peak Oil is not a future event, it is happening today and has been going on for years.
Required Disclaimers & Disclosures:
Securities offered through Cantella & Company, Inc., Member, FINRA, SIPC
Diversification does not ensure a profit or guarantee against a loss. There is no assurance that any investment strategy will be successful. Investing involves risk and you may incur a profit or a loss.Nothing on this report should be considered a solicitation to buy or an offer to sell shares of any mutual fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. The use of Cornerstone Investment Services reports and commentaries is at your own sole risk. Cornerstone reports and commentaries are provided on an “as is” and “as available” basis. Cornerstone Investment Services makes no warranty that reports or commentaries will be timely or error free.This report does not provide individually tailored investment advice. It has been prepared without regard to the circumstances and objectives of those who receive it. Cornerstone Investment Services recommends that investors independently evaluate particular investments and strategies, and encourages them to seek a financial adviser’s advice. The appropriateness of an investment or strategy will depend on an investor’s circumstances and objectives. Estimates of future performance are based on assumptions that may not be realised. References made to third parties are based on information obtained from sources believed to be reliable but are not guaranteed as being accurate. Visitors should not regard it as a substitute for the exercise of their own judgment. Any opinions expressed in this report are subject to change without notice and Cornerstone Investment Services is not under any obligation to update or keep current the information contained herein. Cornerstone Investment Services accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. Reports prepared by Cornerstone Investment Services research personnel are based on public information. Cornerstone Investment Services makes every effort to use reliable, comprehensive information, but we do not represent that it is accurate or complete. This report or portions of it may not be reprinted, sold or redistributed without the written consent of Cornerstone Investment Services. The market commentaries and reports are by John J. Riley and express the opinions of John J. Riley and not those of Fidelity Investments, National Financial Services or Cantella & Co.
Past performance is no guarantee of future results.
Business Insider Emails & Alerts
Site highlights each day to your inbox.