Politics of Energy Message Board

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Politics : Politics of Energy

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To: RetiredNow who wrote (752)	7/18/2008 1:02:23 PM
From: TimF	Read Replies (1) of 86355

To the extent that oil's price really is a bubble that will collapse, that isn't exactly going to help the attempt to put alternatives in place. A lot of alternatives start making some sense (at least in certain applications) at prices as high or higher than todays. If we get a real collapse, then they don't make sense any more. I'm not so sure the oil price really is a bubble. An overshoot on the fundamentals perhaps, but not so big of one I'd label it a bubble. If prices go down to say $80/barrel I wouldn't call that a bubble popping. If today's prices are a true bubble, then when it pops you would expect to see overshoot on the downside as well, and we could be talking about $25 oil. I don't except that to happen. I think the whole "curbs on speculation" movement is misguided. Industry insiders believe that the proper valuation of crude is somewhere between $40-$50 a barrel. Some of them do, other see different prices (like $100), none of them really know, their guessing.

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