Peak Oil

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DEFINITION of 'Peak Oil'

A hypothetical date referring to the world's peak crude oil production, whereby following this day, production rates will begin to diminish. This concept is derived from geophysicist Marion King Hubbert's "peak theory", which proclaims that oil production follows a bell-shaped curve.

BREAKING DOWN 'Peak Oil'

Because oil is a non-replenishing resource, there is a limit to how much the world can extract and refine. Peak oil is the day that oil production reaches a maximum and will subsequently begin to decline until full depletion is ultimately reached.

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RELATED FAQS
  1. How would a true market economy ensure that the world never runs out of oil

    The physical supply of oil will never run out in an economic system where prices are allowed to fluctuate based on supply ... Read Full Answer >>
  2. How much oil must be produced to maintain inventory levels in the United States?

    Domestic energy investors should track the reserve inventory of crude oil for the United States, which is released in a weekly ... Read Full Answer >>
  3. What are average operating expenses for the oil and gas sector?

    The oil and gas sector plays an important role in the economy by drilling, extracting, and processing oil and gas. Because ... Read Full Answer >>
  4. To what extent is the oil and gas sector dominated by a few major companies?

    Oil and gas are two expansive and highly diverse product lines, with active competition domestically and internationally. ... Read Full Answer >>
  5. Why is investing in oil and gas in emerging markets riskier than investing in developed ...

    Investments in oil and gas in emerging markets generally carry higher risks than similar investments in developed countries. ... Read Full Answer >>
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    As of 2015, the long-term outlook of the aerospace and defense sector is uncertain, much like the broader economy. That said, ... Read Full Answer >>

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