Yes, I do believe that for a short period of time, that there was a bubble when investors fled from equities and went into commodities to collect some gains.
Investment houses and their respective hedge funds led the way, and everybody piled in behind them. This has now reversed, and they are going back to equities, but it all can easily reverse again, and again.
Putting aside perceptions, true, false or otherwise, the reality is that we are finding far less new oil and what we are finding is largely sour crude, and not the sweet stuff that our aged refineries can process. Emerging markets will continue to emerge as they now have tasted some degree of prosperity in the form of better food and transport, and transport still needs gasoline, as it will for the foreseeable future.
Oil prices will not hold long at the lower levels, and the resistance at 120 dollars per BBL appears to be holding up. As China's requirements drop in the post Olympic period, there will be a lot of pressure to drop beyond 120, but the hurricane season is only now getting cranked up and the smallest disruption will cause a huge jump in price. Iran, and the entire Middle East is still volatile and anything occurring there will cause a return to the 140-145 level and beyond. $200.00 is still in play this year and beyond.
As for me, I will never again short oil. I don't recommend that anyone does.
I used to say the same thing about Qualcomm and AOL.
Look again.