Peak Oil Hits the Third World

High Oil Prices Bring Energy Shortages

Crude oil reached a new all-time high of $78.77, then promptly fell 8%, taking most of the energy complex down with it.

Does this mean peak oil fears are overblown? Does it mean we’re headed back to $60 oil?

Not likely.


What we saw in the last week has more to do with the sub-prime mortgage meltdown than anything else. It put the fear of freefall into fund traders, causing them to sell perfectly good stocks indiscriminately–especially perfectly good energy stocks, where they were sitting on some nice gains–in order to raise cash. It also gave a sell signal to oil futures traders, who had built up a record level of long positions.

In other words, it was the blowing off of some speculative froth, and little more.

The true bottom line on energy is quite another matter.

Energy and Capital