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. Proven Reserves

    After an oil exploration firm conducts a seismic survey on a ...
  3. Probable Reserves

    After an oil exploration firm conducts a seismic survey of 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 Billionaire

    More than 70 years after his death, this man remains one of the great figures of Wall Street.
  2. Taxes

    Spoil Your Grandkids, Cut Your Tax Bill

    Helping your grandchildren save for college is a way to spoil them and reap some benefits yourself.
  3. Mutual Funds & ETFs

    Commodity Funds 101

    These funds make investing in gold, oil or grain an easier prospect.
  4. Options & Futures

    An Introduction To Canadian Income Trusts

    Yields in excess of 10% aren't rare, but these unique investments need to be chosen very carefully.
  5. Active Trading

    How Does Crude Oil Affect Gas Prices?

    Find out how this commodity's fluctuating price affects more than just how much you pay at the pump.
  6. Economics

    Meet OPEC, Manager Of Oil Wealth

    This organization's decisions can influence oil prices, but there is a limit to its power.
  7. Chart Advisor

    Cocoa Prices Setting Up For A Move Lower

    Cocoa prices have been trending lower over the past several months and the recent bearish crossover between the 50-day and 200-day moving averages suggest that the long-term downtrend is gaining ...
  8. VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
    Mutual Funds & ETFs

    A Leveraged Oil ETN For The Future (Just Not Now)

    VelocityShares 3x Long Crude Oil ETN has the potential for huge returns, but there are several reasons why you might want to steer clear for now.
  9. Chart Advisor

    Commodities Set Up For A Continued Move Lower

    Commodities have been suffering since late summer, and unfortunately for the bulls it doesn’t appear that the situation is about to change anytime soon.
  10. A commodity is a basic good used in commerce.
    Markets

    What are Commodities?

    A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type. Commonly traded commodities include gold, beef, oil, lumber and natural gas. Additional ...

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center