Oil bubble set to burst?

NEW YORK (CNN/Money) – Could the recent spike in oil prices have created a bubble that’s about to burst?

With Hurricane Rita causing less damage that originally feared to the oil industry and oil prices treading water Monday, some industry analysts said we may be about to watch a steady, and significant, drop in energy prices.
“Price declines could be slow this week, maybe with a bubble burst at some point in the future,” said analyst Peter Beutel, president of Cameron Hanover. “It does appear we’ve turned the corner here in this market. I don’t think we’ll see prices at these levels again anytime in the next five years.”

Prices for November crude sank early Monday as traders reacted to reports that damage to the industry’s facilities was relatively light, then stabilized shortly after President Bush gave a speech on supply disruptions from Hurricane Rita.

But prices are still well below levels reached last week when Rita was bearing down on the Houston-Galveston area, and Beutel and some other analysts were worried about a new price spike pushing gasoline to $5 a gallon.

CNN/Money