Quote:
Originally Posted by RBP
But all bubbles need a reason to burst. So far demand has not gone down nor has supply been increased. As well the dollar remains low with no interest rate support from Europe and the rules of the game for invetsors/speculators remain the same.
Oil might take a 25% correction...but that might be from $150 to $112.
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Sorry, fundamentals don't support your reasoning.
The cost of pumping the
world's most expensive barrels of oil is....wait for it.....
$50.00 per barrel. Naturally there are much cheaper barrels being pumped right now. Like Saudi Arabia's $5 / barrel...
The price of oil will crash back down to somewhere in the $70's, most likely.
EDIT: Hell, even the uber-expensive oil shale stuff only costs $70 / barrel to extract. When prices = high, then suppliers will jump in (as they are already doing with the shale and coal-to-oil converstions). With the high prices, demand will drop (as it already has in the U.S.). China will almost certainly drop their huge oil subsidies after the Olympics, thus bringing prices
way up for their populace. This will further kill demand.
Excess supply + lower demand = ?