The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Claude Cormier who wrote (50619)	1/21/2006 4:31:43 PM
From: benwood	Read Replies (1) of 110194

If oil actually hits $300 bbl, then my heating oil tank in the front yard could receive about $4000 of oil in five minutes. That kind of makes it obvious to me that, barring hyperinflation and a breakdown in our society, we won't be seeing $300/bbl oil in the next ten years, nor even $200/bbl. I'd say there's a good chance of $100 and perhaps a spike to $150. However, the deflationary pressure caused by such a spike will serve to reduce demand dramatically, ala the $2-to-$25/bbl oil in the 70s that launched many efficiency efforts that greatly reduced relative demand and succeeded in creating an overcapacity problem which persisted for many years. There's already a shifting of the supertanker caused by $60-70 oil, as can be seen by how ridiculous and out-of-touch Ford & GM suddenly seem. The cultural shift is underway, and the reality of the financial drain of high priced oil will be hard to ignore by consumers who finally realize the long term drain on their financial well being caused by their lazy buying and driving habits.

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