Posted on 07/08/2008 8:02:02 PM PDT by stylin_geek
Ping.
Next thing you know some Congresscritter is going to be agitating for bailing out the oil speculators.
My gut feeling is that we are.
I cant see India and China sustaining this boom
Unlike a housing bubble, there is a worldwide demand for oil that can be shifted from plastics to fertilizer to artificial sweeteners to fuel. If there is a glut of oil in response to high prices, there are 3+ billion people who will use it and billions more who can finally afford oil lamps and moped fuel.
You can have housing exceed demand, and end up with empty houses. With excess oil, it can literally be soaked up by other sectors. And, unlike other commodities, the poor have no limit to the possible consumption.
A drop to reasonable prices, maybe. A crash? No. Saudis will cut off their pumps first.
Its mostly a bubble...from what most financial and oil experts say. I have no idea where the burst will occur.....if even this year...but eventually I can see it dropping back down just below $100 and probably staying around there for a year. The strong dollar element is part of this deal...but we have yet to see that occur in relationship with the Euro.
Oil has crashed in the past. Also, supposedly, China is the big driving force behind the rise in demand. However, see post regarding China’s economic weakness here: http://www.freerepublic.com/focus/f-news/2041668/posts
If China’s economy crashes, and it looks to be on its way, you will see a huge drop in demand and there is no way other sectors that require oil will be able to soak up the excess.
Where’s Greenspan when you need him? If we could get Mr. Andrea Mitchell to do for oil what he did for technology when it had its bubble, we’ll be back to driving 454 Chevelles getting 5 miles per gallon.
I feel the same way regarding the “bubble”.
However we still need to continue developing alternative energy sources so we don’t get hurt again....ever!
As for Saudis, UAE (Dubai), to hell with ‘em! They’re having too much fun with our money! Wait ‘till we stop buying from them totally! I can bear to see them cry like a baby! Heh
Heck, between shale oil and coal gasification, we could become net exporters of energy for a couple of centuries. How does that thought strike you?
Neither can I, personally. I’ve been saying for a while now that all we have to do is ride this out and the market will reach a point of of being unsustainable.
China and India have blinked. China could NOT sustain the support they were giving at the current market price. Neither could India.
With both of those countries drastically cutting state subsidies of oil and gasoline prices, their demand will drop, too.
How this will all playout in the election scares me though
When will the idiots in our media figure out that these are one in the same. The projected supply/demand is what future predictions of prices are based on.
Contact your Congress critters to let them know that you are tired of high gas prices.
My guess is $60 per barrel by March 2009.
Look, people. There's no evidence anyone is hoarding oil. Speculators buy futures, not physical oil. If spot prices were out of line with fundamentals, someone has to be pulling physical oil off the market and hoarding it. That's just not happening. Ergo there is no bubble. Period.
Nonsense. The only so-called "experts" claiming this are either political hacks or traders who don't like the fact that university endowments and pension funds are trespassing on their turf.
I know of not a a single reputable economist, and by that I mean someone with a tenured or tenure track position at an accredited research university, who claims there is a bubble. Every reputable economist I've talked to or read doesn't think there is a bubble.
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