Oil bubble to burst: Forbes

Herald Sun ^ | 30 August 2005

[RWR8189]

Most funds should be diverse enough so that crude falling back to where it was 36 months ago won't be catastrophic for most people unless they intentionally set up their fund to be heavy on energy.

[Schwaeky]

then fund managers will learn to know better, and in any case ordinary americans will when they get wise to it they will be on a warpath to lynch the fund managers that put the financial end of this crisis in motion by skyrocketing oil/gas prices. They should be dealt with like the pillagers of Enron et al.

[wildcatf4f3]

duh,? I don't get it. maybe if I sent you a thousand dollars could you maybe like explain more about why I is so dumb. Huh?

[Lejes Rimul]

I'm glad to see you're willing to fight your private little war against oil speculators down to the last ordinary American.

[Dustbunny]

Praying the Forbes is right!

[Dustbunny]

RECORD oil prices this week were evidence of a speculative market bubble

I keep wondering if this is Soro's manipulation of oil futures hoping to make dubya look bad.

[Porterville]

oil bubble... that I believe

[mukraker]

I have heard one more explaination that seems to make sense...because it follows the law of supply & demand.

Energy production runs 15-20-year cycles. That's about how long it takes to develop new technologies, production, & accceptance in the market.

The way it works is there is an energy shortage. Prices surge. The higher prices make new technology/new production fiscally attractive to the private sector. New energy sources are found and developed. The shortage turns into a surplus, and prices drop. But now we have all this new production capacity, more than can be utilized.

Over time, energy use/consumption catches up with that excess production/capacity. The supply/demand equasion reaches equilibrium. Then the demand side keeps growing, causing a shortage again. The cycle repeats.

We're at the stage where our demand has surpassed our supply side of the equasion. (Well, not really. Just at "reasonable" prices.) Even now, new technologies and new sources of energy are being considered, now that they're economically feasable. The supply side will catch up with the demand side soon.

[Ursus arctos horribilis]

Would you rather see it go to six dollars a gallon in that same 36 months??

[Ursus arctos horribilis]

Only a wounded lion would be more dangerous than a hungry lion. But, force our backs to the wall, and the world might see the US react like a hungry, and a wounded lion.

[denlittle]

This is also what I have long suspected. I would wager that Soros and his cronies have been working this program since long before the last election.

[kublia khan]

You and I! Who bailed out the savings and loan mess of the 80's? I wish our government didn't work that way but as I've said earlier this very night. The rich and powerful protect the rich and powerful.

[snarks_when_bored]

Yes, I could've added 'wounded'. Good point.

[I_dmc]

Personally, I'd like to see the Strategic Oil Reserve full. The name should be clue enough for all. Concept: Just how does one fight a war when the first weapon used is the nation being cutoff from the it's supply of oil?

[anti-infidel]

Until the bubble keeps on growing, I will ride the bubble buying XTO and Lufkin.

[gpapa]

The oil bubble will burst. The gasoline bubble may not drop as much. No new refineries built in USA since 1976.

[Finalapproach29er]

Ditto that sentiment.

[Caipirabob]

I doubt this. There an election in 14 months. The elite rats will ensure that speculation continues to push the price of oil. This bubble won't burst until mid-November 2006.

[Paladin2]

It took 5 years for oil to fall from the peak of the early 80s. At these prices, demand will fall/cease to rise as quickly as people move to alternatives.

For instance, we bought two Diesel cars that get 50mpg to replace two 22 mpg gasoline vehicles. Now our gasoline consumption is zero. Our oil consumption is down by >50%.

Not economically sensible, but it does reduce domestic oil consumption. Next step - secure a one or two hundred gallons of Diesel to be able to refuel from home for a couple of months. My consumption will look to rise, but then drop to zero for a while. Others will act. We live in interesting times.

[Uncle Fud]

Anyone who has a significant amount of retirement money invested in such a volatile (no pun intended) commodity as oil is:

(1) setting themselves up for large swings either way, for which they had better be prepared; and

(2) marching in step with Hillary, Harry, and Nancy in that what is good for them personally is disastrous for the American economy.