The Peak Oil Bet

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In 2006, Matthew Simmons and John Tierney made a bet on the average price of oil in 2010.

Their final agreement was a commitment to tabulate every closing price-per-barrel of oil for each market day of 2010, then average out those prices for the entire year from January 1 through December 31, adjusted for inflation to 2005 prices. If the year-end adjusted average comes out to $200.00 or more per barrel, Mr. Simmons wins. If it averages out to less than $200.00, Mr. Tierney wins. The winner takes the entire pot of US$10,000.00, plus interest–$5,000.00 from both parties, currently sitting in escrow.

The Oil Drum had some coverage on the bet in 2008.

Obviously with the current state of the world economy oil prices will not even rise above $100 for even one day in 2010. Simmons will lose big and Tierney will win.

If China sees a large rise in oil demand over the next few years, then eventually a significant rise in oil prices is likely from demand increase and inability of supply to increase to match.

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