Simmons unlikely to win $10,000 oil bet with Tierney
Matthew Simmons is very unlikely to win his $10,000 bet with NYT columnist John Tierney that the average price of oil in 2010 would be more than $200 a barrel. Of course that was true before 2010 even started, but it's quadruply true now that 2010 is half-over and oil is $73. Simmons needs oil to go well over $300 for the rest of the year.
At the end of 2008 Simmons was still confident, expecting a sharp, "V-shaped" economic recovery that would shatter the record prices set for oil that year. “We’re going to create a ’V’ that’s very dangerous," he told me. “We could pierce through the old price high like a hot knife through butter in a very short period of time.”
Haven't talked to him lately, but it's hard to imagine him being that confident now.
Comments
Certainly he's still that confident. He understands the precipice we're on. A price spike will occur as soon as demand increases again. There is no production cushion above about 86 mbd. Where does the new production come from? Is population decreasing or increasing? Is demand from China and India likely to grow or fall? As soon as someone begins production on three new Saudi Arabia's, then we can go back to cheap fuel for the foreseeable future. Although, how fast does the 6 billion people become 12 billion?
Posted by: Robert G. | July 22, 2010 12:57 AM