Skip to main content

Oil: history and future

We have two rather unique articles on the subject of oil to share with you today. If you have any interest in the past and future of the oil and energy industries, I think you'll find these articles very worthwhile.

Our first piece is a brief historical background on the rise of the Middle Eastern oil industry. Taken from Sunday's edition of the Chicago Tribune, this article was written by Tom Hundley and is entitled, "A find rich in history".

Here's an excerpt:

"When the price of oil roared to record highs last week, it was duly noted. But another milestone passed almost unremarked: Monday was the 100th anniversary of the discovery of oil in the Middle East.

Britons William Knox D'Arcy and George Reynolds are not exactly household names in America, but it was D'Arcy's money and gambler's nerve, and Reynolds' hardheaded persistence that brought in the first gusher in what is today Iran. The discovery would change the world.

Over the next century, as America and the Middle East became locked in an extraordinary embrace, the flow of cheap, abundant oil would bring wealth and war; it would fuel mighty economies, determine the destinies of nations, and shape the everyday lives of almost everyone on the planet."

Excellent article and a quick read. Do check it out.

Stretching even farther back into the oil industry's past is this latest article from Edward Chancellor in today's Financial Times print edition, called, "Whale of a future for oil industry".

In this piece, Chancellor notes that while the "peak oil" theory of oil production decline is likely to take effect at some point in the future, higher real prices for oil in a time of diminishing supply will provide incentives to develop new energy substitutes.

Excerpt from "Whale of a future...":

"Long-dated oil futures have recently climbed above the spot price. Contango (the jargon for this situation) in the oil market may be a sign that bears are covering their short positions after the dramatic price spike or that producers are unwinding their hedges.

However, commodity investors are also playing a part. Some are doubtless motivated by a belief that the world is running out of oil. Exponents of “peak oil” might benefit from examining the history of another source of energy that went into decline a century and a half ago. The rise and fall of the American whale oil industry provides certain pointers as to where the modern oil industry could be heading."

Chancellor is a very interesting and engaging writer, always worth a read. So have a look at both articles and get an added bit of perspective on where we've been and where we might be going, energy-wise.

For more on the "peak" crude oil/whale oil analogy, see The Oil Drum's recent post on this subject. Fascinating stuff.

Tune in for our next post, when we'll talk more about the possible future of energy. Until then, enjoy the articles!

Popular posts from this blog

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4. ...

Marty Schwartz Talks Trading, Life at Amherst College

Trader and Pit Bull author, Marty Schwartz speaks at Amherst College and shares lessons on markets and life in a rare, hour-long video session (Hat Tip: Tischendorf Letter ).  You may also know Schwartz from his interview in Jack Schwager's Market Wizards , a chapter which I will revisit in a follow-up post.  For now, let's absorb some of the wisdom and life lessons he imparts to the students at Amherst. Those of us who are students of trading and life may find a few pearls in the highlights below:  Marty Schwartz begins his talk by relating some of his experiences as an Amherst student back in the 1960s (a technological "stone age" by comparison to today). He was decked early on with some pretty poor grades, but he fought to get back on track and completed his studies successfully. One recurring theme from the early portion of his talk is, "it didn't kill me so it made me stronger." . Schwartz tells students, "I'm here to tell yo...