Bubble, bubble, oil and trouble. Fraud!

[Mulligan]

Ok, I'm no genius, but even I recognize a scam. Does no one remember the .COM bubble? Easy money right? When that bubble burst, what came next. Real Estate. Easy money right? When that bubble burst, what came next? Oil futures. There's no oil shortage. It's a shell game (no pun intented). It's the same speculative, get rich now game, and it will burst just like all the others. What's next. My guess is food or grain, or something people will kill for and pay through the nose for because they need it. I'd say drugs, if it was on the stock exchange. That's my rant and I' sticking to it! :hat

ps. rant. Someone ought to investigate how much money Greenpeace has invested in oil futures because they and their ilk have effectively roadblocked any domestic investments in oil exploration, coal alternatives or nuclear.

[mikenelson]

I don't see the current rise in oil and other commodities as being a "bubble" in the traditional terms you're referencing. This rise is directly correlated to a devaluing of our currency, which is in absolute contrast to the past bubbles we've seen. The so-called bubbles of the past 20 years now were heavily engineered and guided, and in hindsight were artificial means of helping the economy to appear in better shape than it really was, with a heavy dose of opportunistic greed involved.

I'd say we're seeing the last real bubble burst - the credit bubble. Real estate was a natural part of this due to the nature of how homes are almost solely financed through borrowing, but other consumer and corporate borrowing are a big part of it. Where else was there to go? Without some new industrial or technological revolution and resulting boom, there just wasn't enough money to satiate the demands of wide-eyed consumers the world over wanting to fill their homes and lives with gadgets and toys. Which is where credit comes in. But unless wages continue to rise to meet the future financial obligations all these borrowers have, it's bound to collapse. And it can be seen from the top-down - it's the exact situation our own government is in, our banking system, our corporations and industries, and our citizenry. Trickle-down economics indeed. The only reason some of the mega-corporations aren't in the same boat is because they took the cheap way out that none of us can afford to do - go to some other country where you can pay their citizens literally pennies on the dollar and cut your overhead dramatically, then come back and sell the goods to us.

I guess my point is that there are no more bubbles left once the amount of money available or the reasonable prospect of meeting future obligations of theoretical money (credit) has been tapped out. The last safe havens of a desperate wealth-class are in things they know people have to buy no matter what.

[Rondaben]

I don't see the current rise in oil and other commodities as being a "bubble" in the traditional terms you're referencing. This rise is directly correlated to a devaluing of our currency, which is in absolute contrast to the past bubbles we've seen.

BINGO.

[Mulligan]

I don't see the current rise in oil and other commodities as being a "bubble" in the traditional terms you're referencing. This rise is directly correlated to a devaluing of our currency, which is in absolute contrast to the past bubbles we've seen.

Maybe......but I'll wager if the govt. puts some kind of regulations back into effect to curb oil future speculators, you'll see prices come down. Speculators are simply taking their money out of real estate and the stock market and hedging with oil futures. Most experts I've heard say oil prices with today's supply and demand should be no higher than $70 a barrel.

I also remember real estate and mortgage experts saying there is no real estate bubble in '04, by the way.

[robinhoooood]

This run up in the price of crude is not mainly speculation... This oil is being used on a daily basis... the supply and demand of our world is about neck and neck.. so even if someone did bid up the price he would have to sell that contract relatively quickly because he doesn't want a few hundred barrels of oil on his desk or on his back porch.... so there must be a buyer for that commodity right? Someone is willing to pay that price for the oil.... if there were cheaper options they would buy from them... but this is not an elastic item... the price for oil is going up all around the globe... there are many different prices for oil in different countries and some are even higher than WTI or Brent crude... are those being pushed up by speculation too? I will say that speculation plays a part but to think that it is the main driving force that has caused prices to double in a year is wishful thinking... Oil probably is a bit high due to the excess of money leaving other markets, but supply and demand are playing a big role as well and of course our dollar is adding to the havoc... if this wasn't the case the price would fall when Saudi announces it will pump 500,000 more barrels a day.... but it is not totally understood where we stand on supply and demand... we could be outstripping supply right now! And we won't know until a few more months of data comes in....

I would say the true price of oil is probably somewhere around 100-110.... regardless... when you consider how many energy is in just one gallon of gasoline... $4-$5 a gallon really seems cheap....

Oil is becoming harder to find... and we are reaching a point where we cannot pump enough for everyone to live like us Americans have lived for a while now... China and India and the OPEC nations are all drastically increasing their consumption of oil... they all want to live like us.... and we are not pumping enough oil to feed this hunger for energy... even if we drilled EVERYWHERE we could in the US and we could pump that today... we would still need imports to run our nation.... We can drill the entire planet... at some point you will reach the peak maximum flow rate of the world.... what is that number? I don't know.... but we have been pumping between 84-86 million barrels a day now since about 2004-05 ... the major projects coming online will not offset the declines in maturing fields... so I guess my point is.. I am not sure what the mystery is here.... we don't have enough oil for the world to keep growing at the rate it is growing! And that is the reason the price is going up... people must be priced out of the oil market to free up supply.

I mean it is simple math.... If the world needs 87 million barrels a day and we can only supply 86... someone is going without... The largers fields of the world are declining... you have to make that up with new production coming online (which is becoming more and more expensive) and if you don't make it up... your production goes down... this is not hard.... The IEA has already said we are about to enter an "energy crunch" between 2009-2012 what do you suppose they are referring to...? when they have been pleading with Saudi to pump more oil for the better part of the last year..... So now we are going to find out... if they have anymore spare capacity... or if they have been lying about their figures.... only time will tell... something tells me though... we better get ready for $6-$10 for gasoline... a ridiculous increase in electricity... and food... because it is all related...

[Mulligan]

This run up in the price of crude is not mainly speculation... This oil is being used on a daily basis... the supply and demand of our world is about neck and neck.. so even if someone did bid up the price he would have to sell that contract relatively quickly because he doesn't want a few hundred barrels of oil on his desk or on his back porch...

I'm sorry, but I have to disagree. In my opinion, the price of oil is controlled by oil futures. Oil hit $140 a barrel today and dropped to $134 on the same day due mainly in reaction to promised Saudi production increase. It had nothing to do with supply and demand for this day. There is nearly $200 Billion invested in oil futures. If they all sold them off, the price of oil would drop just like any other commodity or stock. Now we can all have a really productive debate on the virtues of fuel conservation and alternate energy which is fine, but the price of oil has as much to do with supply and demand as C02 has to do with changing weather patterns. It's all about control, and it's something we all know is coming. Or at least we should.

[jeshurun]

"A lightbulb burns brightest just before it goes out."

There are technologies on the horizon that will make oil obsolete under a decade. This could be the big oil industry's "last hurrah." The market has been known to be manipulated.

[BackHomeAgain]

Maybe......but I'll wager if the govt. puts some kind of regulations back into effect to curb oil future speculators, you'll see prices come down. Speculators are simply taking their money out of real estate and the stock market and hedging with oil futures. Most experts I've heard say oil prices with today's supply and demand should be no higher than $70 a barrel.

I also remember real estate and mortgage experts saying there is no real estate bubble in '04, by the way.


They already have put in new regulations. You just don't hear about it because they are squeezing the exchanges behind the scenes.

Instead of buying oil on 10-1 margin, down to 3-1 in many cases. That only forced a one week spit up.

They did the same thing to Gold right after Bear Stearns went under. The USA doesn not have free markets anymore, and I would question anything that the Fed + Feds say right now.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/31/cnoil131.xml

[robinhoooood]

I'm sorry, but I have to disagree. In my opinion, the price of oil is controlled by oil futures. Oil hit $140 a barrel today and dropped to $134 on the same day due mainly in reaction to promised Saudi production increase. It had nothing to do with supply and demand for this day. There is nearly $200 Billion invested in oil futures. If they all sold them off, the price of oil would drop just like any other commodity or stock. Now we can all have a really productive debate on the virtues of fuel conservation and alternate energy which is fine, but the price of oil has as much to do with supply and demand as C02 has to do with changing weather patterns. It's all about control, and it's something we all know is coming. Or at least we should.

So then let me see if I understand.... you are saying the price of oil has almost nothing to do with supply and demand?? Just want to make sure I understand your analogy....

[Rondaben]

So then let me see if I understand.... you are saying the price of oil has almost nothing to do with supply and demand?? Just want to make sure I understand your analogy....

IMO, thats exactly correct. It has much more to do with a very week, dying dollar.