Peak Oil will be one of the main issues of this decade, and although likely to be volatile due to more frequent recession, how high the price of oil will go will probably to surprise most people, maybe including myself.
Colin Campbell is a retired petroleum geologist who is an expert on peak oil.
He has been interviewed in February 2011, see the four parts video below for his insights on peak oil and the consequences it may have.
If you plan to invest in crude oil, avoid most ETF such as USO or UCO based on crude oil futures as those have terrible long term performance due to contango.
RJI (ELEMENTS Rogers Intl Commodity ETN) is much better to follow the price of oil, although it only has 40% invest in crude oil (WTI and Brent) and the rest being industrial commodities, precious metals and agriculture commodities.
Another way is to invest in company in the oil sector which can be done via OIH ETF which tracks the performance of the 18th largest oil companies in the world. The main risk here is that those company will not be able to increase their reserves and it may spook the market, even if the price of oil goes up.
It may not be the best timing to invest in oil at the moment, since high oil price usually trigger a recession, but longer term it should perform relatively well.
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ReplyDeleteBlogger etcgreen said...
ReplyDeleteMr. Soltani asked Dr. Campbell about the issues of the world's population growing from the current 7 billion to 9 billion over the coming years and Dr. Campbell simply stated that he was projecting that the world's population was actually going to be reduced to 3.5 billion by the end of this century.
Mr. Soltani also suggested that hydrogen would be a major solution in the coming years to reduce the impact of petroleum. Secretary Chu's first major directive in office was to evaluate the "Proverbial Hydrogen Economy". The status report came back in May 2009 and called for $T's more in research, development, execution and a 50 year time line. Funding was canceled and this solution was put on hold indefinitely - a prudent decision. [2010 - several hundred $$ barrel equiv.]
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