Last July the prices of oil hit a record high of almost $150 per barrel. After that it has tumbled because of the global economic downturn which led to cut in energy consumption by consumers and companies equally.
Prices have mustered up from lows of $35 a barrel in December to $50 but still remained well below what a lot of oil companies and producing countries agree that they have to endow in fresh production.
Simmons, who is an advocate of the “peak oil” theory, argues for years, that world oil production is in unalterable turn down because oil industry substructure has become very old.
He said that the price of rebuilding the oil industry is immense. It is somewhere closer to $100 trillion than $50 trillion over decade. Thus the asset base of the industry is outside its unique design life.

Source: Reuters