Dotcom crash, credit crunch, oil bubble?

LONDON (Reuters) – The Dotcom boom and bust shook the world economy almost a decade ago, last year the credit crunch seized up financial markets, now an oil price bubble may cause more havoc.

A rapid price surge, big investment inflows and a chorus of bullish analysts are some of the characteristics of the oil market that have echoes of the Internet boom of 2000.

In the Dotcom era, securities analysts and strategists talked of a new economic paradigm created by the Internet and high tech companies. It didn’t matter that many “New Economy” companies had barely any revenues or profits.

This time analysts and economists point to a structural shift in the price of oil. Supply will struggle to keep pace with huge demand growth from China and India for years to come.

The word bubble has started to appear regularly in investment bank research and in the media, given oil’s virtually uninterrupted climb this year.

Reuters