[extropy-chat] Peak Oil news
sjatkins at mac.com
Tue Mar 7 10:35:40 UTC 2006
On Mar 6, 2006, at 7:07 PM, Hal Finney wrote:
> Personally, I like to look at the markets to get an idea of the true
> consensus on an issue. Oil is expensive these days, about $64 a
> You can buy and sell futures contracts for oil delivery on up to the
> 2012 time frame, and generally those long-term oil contracts are
> about the same as today. Prices climb slightly up until mid 2007 and
> then decline to about today's levels.
> It's not clear how to interpret this, but on its face it doesn't seem
> to point to a particularly drastic Peak Oil scenario. OTOH if you
> look at options contracts they give you an idea of the range of prices
> the markets expect, and that turns out to be very wide. If you look
> at prices at the end of 2008, the one-sigma price range is $34-104,
> which corresponds to a 68% chance. The two-sigma range, corresponding
> to a 95% chance, is $20-180. So the markets are certainly not ruling
> out oil in the high $100's in the two to three year time frame.
> Such a
> high price would almost certainly cause a serious recession. Of
> the markets aren't ruling out $20-30 oil either, in which case we can
> go back to bathing in the stuff.
The markets, as anyone who plays them knows, are not altogether
rational. So I find it unlikely that examining market price
structures will give good evidence for or against Peak Oil.
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