Tuesday, 9 October 2007

No More Oil at 2057

At the moment most of my money is put in Australian shares and the energy sector makes up about 5 per cent of the ASX200. If energy companies fail, what effect would this have on my investments or my super fund?

On Wikipedia is a graph of US Oil Production and Imports. Oil production in the USA peaks at about 1970 when 9.5 million barrels were made. At 2000 that had reduced to 6 million barrels. Taking these two points and performing a simple linear extrapolation, I calculate that US oil production will end at 2057, which is 50 years away.

If you sell your energy stocks before 2057 and put it into another sector, that is no guarantee you'll be safe because almost all industries are reliant on oil. For example, mobile phones are made from plastic whose production and transport is reliant on oil.

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