Bet on oil as the newest bubble

Every bubble needs a story. The Internet story was that the whole economy would shift to the Web. The housing story was that people don’t trade Cape Cods and ranchers like penny stocks and that Wall Street knew how to lend to high-risk borrowers.

The energy story is that the planet is running out of oil, and we must pay $115 a barrel or more or return to the Stone Age. The “peak oil” theory, a fringe doomsday scenario a few years ago, is now an investment philosophy.
Like the other bubble stories, the energy tale contains substantial truth. It’s just a matter of how much the truth is going to cost you.

Some energy analysts believe the natural price of oil, based on supply and demand, is $70 a barrel or less. This implies we’re already into bubble territory.

Baltimore Sun