Hubbert Peak Theory

AAA

DEFINITION of 'Hubbert Peak Theory'

Similar to the predictions of the Hubbert Curve, the Hubbert Peak Theory implies that maximum production from an oil reserve will occur towards the middle of the reserve life cycle.

The theory suggests the production rate from a region follows a bell shaped pattern. The region can be a country or just a certain oilfield.

INVESTOPEDIA EXPLAINS 'Hubbert Peak Theory'

Although the Hubbert Peak Theory has been most discussed in reference to the oil industry, the theory is also applicable to natural gas, coal, transition metals, precious metals and even water.

Prior to natural resource extraction, a firm will often estimate the expected Hubbert Curve to gain insight into future production rates.



RELATED TERMS
  1. Hubbert Curve

    A statistical theory of oil production that states that the rate ...
  2. Probable Reserves

    After an oil exploration firm conducts a seismic survey of a ...
  3. Proven Reserves

    After an oil exploration firm conducts a seismic survey on a ...
  4. Oil Reserves

    An estimate of the amount of crude oil located in a particular ...
  5. Royalty Interest

    In the oil and gas industry this refers to ownership of a portion ...
  6. Peak Oil

    A hypothetical date referring to the world's peak crude oil production, ...
Related Articles
  1. Rockefeller chose the refining business, where the profits were smaller but more stable.
    Economics

    J.D. Rockefeller: From Oil Baron To ...

  2. Taxes

    Spoil Your Grandkids, Cut Your Tax Bill

  3. Mutual Funds & ETFs

    Commodity Funds 101

  4. Options & Futures

    An Introduction To Canadian Income Trusts

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center