[dhfenton]

This article is specificly directed at investors. Oil bubble means that oil stocks are over valued in their opinion. The crash they are referring to is a crash in the price of oil stocks. They make a couple of remarkable observations to make that determination. First, they say demand will weaken. I don't know how they made that determination. They also say that it is becoming evident that there is abundant supply; again, I don't know how they made that determination. Given those conditions the futures market in oil would indeed come crashing down. Stocks for oil companies would also probably lose value. The assumptions they make seem to be very contrary to the world oil market we see today. The important point is that they aren't saying we're going to have a supply shock (peak oil). Don't misinterpret this to support Peak Oil, actually it is quite the contrary, it says Peak Oil isn't happening.

[bruin]

This guy believes oil conservation and oil alternatives, such as oil sands, will cause oil prices to fall. I can see the conservation path helping out, i.e. recession. Of couse, if we are in a recession then we are in the turmoil of PO, aren't we now?

http://money.cnn.com/2005/06/16/news/in ... /index.htm

[cat]

It seems to me that most economists, these guys included, do not take the fact that oil is a finite resource into consideration. They assume we will have oil forever, or at least until the forseeable future. They probably have never been educated on the subject and are so focused in their own narrow expertise that it doesn't occur to them to look at the bigger picture. Economics does get very complicated and is about as perdictable as the weather. It is probably most useful to gather what information they do offer and make your own conclusions based on your knowledge of "peak oil". It can be frustrating though, I was reading an interview with three intelligent economists in Harper's the other day, and they saw the most pressing economic problem as Social Security, not one mention of energy.

[chris-h]

Only in a case of a limited nuclear war could their predictions come true.

[MicroHydro]

Not possible. Here is a more likely scenario:

1) Global economy and equity markets drop (agree with that)
2) Oil consumption drops (agree with that)
3) OPEC and other producers breathe a sigh of relief for the opportunity to rest their over stressed fields and top off their emptying tank farms. Agressive production cuts keep Dubai oil above the $50 target. There has been a paradigm shift. Fifty dollar oil is seen not as a problem but as a solution. Recall that oil producers need a stable price of $50+ to justify spending billions on new projects. Any short term market panics will be quickly terminated by production cuts.

[Sgs-Cruz]

Um, look down about seven threads:

http://www.peakoil.com/fortopic8862.html

[JoeW]

$this->bbcode_second_pass_quote('MacG', '.')...There is a crowd of economic "dissidents" out there ... and they claim (with god backing)

[nth]

$this->bbcode_second_pass_quote('MicroHydro', 'N')ot possible. Here is a more likely scenario:

1) Global economy and equity markets drop (agree with that)
2) Oil consumption drops (agree with that)
3) OPEC and other producers breathe a sigh of relief for the opportunity to rest their over stressed fields and top off their emptying tank farms. Agressive production cuts keep Dubai oil above the $50 target. There has been a paradigm shift. Fifty dollar oil is seen not as a problem but as a solution. Recall that oil producers need a stable price of $50+ to justify spending billions on new projects. Any short term market panics will be quickly terminated by production cuts.

[bruin]

Doh!

[jimmydean]

I think he is hedging on some form of global economic slowdown coupled with a continued strong demand in the U.S. for more fuel efficient vehicles. Given Bush's proposed $4K subsidy for buying hybrid type vehicles it wouldn't be that far fetched than over the next 5 years U.S. demand actually goes down by 5M bbl/day or more.

[nth]

$this->bbcode_second_pass_quote('cat', 'I')t seems to me that most economists, these guys included, do not take the fact that oil is a finite resource into consideration. They assume we will have oil forever, or at least until the forseeable future. They probably have never been educated on the subject and are so focused in their own narrow expertise that it doesn't occur to them to look at the bigger picture. Economics does get very complicated and is about as perdictable as the weather. It is probably most useful to gather what information they do offer and make your own conclusions based on your knowledge of "peak oil". It can be frustrating though, I was reading an interview with three intelligent economists in Harper's the other day, and they saw the most pressing economic problem as Social Security, not one mention of energy.

[aahala]

I noticed the article used the word "could" seven times, once with
the bullish $105 price and the others with the bearish prediction.

This reminds me, "I COULD win the lottery this week."

Since that statement does not violate a physical law, or internal inconsistency then the statement COULD be true.

[nth]

$this->bbcode_second_pass_quote('aahala', 'I') noticed the article used the word "could" seven times, once with
the bullish $105 price and the others with the bearish prediction.

This reminds me, "I COULD win the lottery this week."

Since that statement does not violate a physical law, or internal inconsistency then the statement COULD be true.

[shortonoil]

.
If this guy believes that tar sands are going to make a difference, he's probably not worth listening to. Tar sands are at best, only a small energy gain.
.

[clv101]

I think it's very likely that today's high prices could cause enough demand destruction to depress oil prices significantly. This isn't a 'good thing', it's how peak oil could be expressed - as an economic disaster first and foremost with the underlying energy disaster going virtually unseen.

[agni]

$this->bbcode_second_pass_quote('jimmydean', 'I') think he is hedging on some form of global economic slowdown coupled with a continued strong demand in the U.S. for more fuel efficient vehicles. Given Bush's proposed $4K subsidy for buying hybrid type vehicles it wouldn't be that far fetched than over the next 5 years U.S. demand actually goes down by 5M bbl/day or more.

[MacG]

$this->bbcode_second_pass_quote('clv101', 'I') think it's very likely that today's high prices could cause enough demand destruction to depress oil prices significantly. This isn't a 'good thing', it's how peak oil could be expressed - as an economic disaster first and foremost with the underlying energy disaster going virtually unseen.

[clv101]

The reason I don't say it's a good thing is that without recognising the energy disaster we won't even attempt to address it. We won't go on a major efficiency or alternatives drive. We'll just have one big, nasty, ever-deepening depression.

[airstrip1]

In April 2005 Goldman Sachs were predicting a super spike that would push oil to £105 a barrel in the near future

http://news.bbc.co.uk/2/hi/business/4399537.stm

Now Morgan Stanley think the oil market will crash.

My immediate thought is that Goldman Sachs are long oil and Morgan Stanley are short. All these institutions have a vested interest in the market so their pronouncements need to be regarded with a touch of cynicism.

[Ardalla]

Yes, it implies that PO is NOT a reality. As a result of normal business cycles and a slowing of the world ecomomy, the present high price of oil cannot likely be maintained. Several examples/trends are given.

Indeed, if you isolate all the data that supports a price collapse and ignore the data saying that it's not likely, then you end up with this conclusion.