Sad news for peak oil disciples

OVER the weekend, energy expert Daniel Yergin took to the pages of the Wall Street Journal to argue that "peak oil" is a phony concept, a "specter" that's unlikely ever to materialise. The concept of peak oil, for the unitiated, is that humanity is close to reaching peak production of the world's finite supply of oil.

CALGARY — The deteriorating price environment for Alberta’s oil sands stands to spur development on Canada’s East Coast, where new seismic work has uncovered three “very large” but highly prospective oil fields in the Labrador Sea. The subsea structures, revealed after a two-year seismic program mapped an area equivalent in size to the Gulf of Mexico, are being shopped around to international oil companies as a promising new deepwater exploration frontier by Nalcor Energy, Newfoundland and Labrador’s provincially owned energy company.

There is nothing but “Sad News for Peak Oil Disciples” these days, according to the Financial Post.The latest example: Leonardo Maugeri, a fellow in the Geopolitics of Energy Project at the Kennedy School’s Belfer Center for Science and International Affairs—and a long-time critic of Peak Oil analysis—has just published a new report, “Oil: The Next Revolution,” in which he forecasts a sharp increase in world oil production capacity and the risk of an oil price collapse.

Yesterday, Citi commodities analysts Seth Kleinman and Ed Morse declared that "the end was nigh" for oil demand.  They're not alone.

Last week, I agreed to do an interview on OilPrice.Com. The initial interview was conducted over the phone, with follow-up emails. The interview first appeared on OilPrice and is repeated below. Introduction:

In the requests thread, a number of people wanted me to comment on “peak oil.” The main thing I have to say about this is that I don’t totally grasp the alleged significance of reaching a global production peak. It seems to me that to generate the conclusion of big time oil price spikes you only need the assumption that oil production will grow at a persistently slower rate than the world economy.

Article written by Prieur du Plessis, editor of the Investment Postcards from Cape Town blog.The article below is a guest contribution by Puru Saxena of Puru Saxena Wealth Management in Hong Kong, courtesy of The Daily Reckoning.