(i said low prices were only temporary... note that even with a proposal of a huge investment in production, there will still be decline... it will only reduce the bleeding, not stop it... when we were clamoring for cheaper gas last summer, we were essentially rooting for the hastening of the effects of peak oil) Financier sees oil shock from credit crunch ... Matt Simmons, founder of Houston-based investment bank Simmons & Co, argues the underlying rate of decline of the world's aging oilfields is as much as 20 percent a year and only high levels of investment can reduce that to single digits. With credit tight and oil prices almost $100 a barrel below their highs last year, oil companies are unable to sustain previous levels of spending and the result is falling production, he said in an interview on Thursday. <snip>... Simmons says many OPEC oil producers will find it difficult to bring output back to previous levels once prices recover. "When you have an old oilfield whose flow is being maintained by extremely high levels of investment and you reduce production, you rarely if ever get back to where it was." Because of this and natural declines in output, oil use may not need to rise much before production fails to meet demand. "Unless oil demand falls by 10 or 15 percent per annum, which it is not going to do, then we don't need to wait for oil demand to come back before we have a supply crunch," he said. "Within a few months, we are going to realize our visible inventories are really tight -- squeaky tight -- and what would really be inconvenient is to see a recovery in the economy." He sees oil prices eventually exceeding last year's high: "Sooner or later we will burst through that like a hot knife through butter."