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malco

Oil Price Just Another "bubble"?

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Follow this link to what Steve Forbes has to say about oil price rises:

http://www.theaustralian.news.com.au/commo...55E2702,00.html

He reckons the real price is about $35/barrel and the rest is speculation. The bubble will burst and he confidently forecasts prices in the $35 to $40 in about a year. If prices go up to $100, that just means the bubble will burst with a louder bang.

He also says the war in Iraq is a war against terrorists.....

But we should always sustain our scepticism. About the prognosis for the oil price I mean.

He doesn't mention Peak Oil. :lol::P:rolleyes:

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Yep, the boys who brought us dot.con and housing as bubbles are now bringing us oil, gold and other commodity bubbles.

I bet some of them are even helping to create the bubble(s) in these areas via numerous websites like this.

In the dot.con collapse there was an IT contractor I know who rang around al his friends, anyone he knew in fact, telling them to buy into certain shares because he had heard that they were going to soar... wonder why he did that. What I mean, VIs exist everywhere... even here B)

Be careful out there people!

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"What I mean, VIs exist everywhere... even here B) " :lol::lol::lol:

Never a truer word said. I like the ones who go on about shares, etc then close off by saying DYOR. Can't argue with it but it always makes me smile.

Edited by Loftus Road

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Just as long as the bubble does not burst until my tank runs dry.. Just filled it and I don't want to be left feeling like someone who bought a property in the last few years...

negative equity.. on my fuel..

Mind you. if you want to see an investment yield high returns I just about double the value of my car every time I fill her up :)

now should I get a loan against it.. spend it on fun and then realise that I actually have to pay the money back..

Does that happen when you release equity...?

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Perhaps oil will be seen as a bubble, perhaps not.

We are not in a position right now to know how the 'fundamentals' of supply/demand have changed. This will probably only be known in retrospect. But quite possibly they have - there will always be speculation that pushes the trend higher than it otherwise would be but the days of $25-$50 barrel oil appear to be over for good.

On the other hand, it was always easier to see that housing was a bubble because there was no way either the population in the UK had gone up *3 times or alternatively the total housing stock had gone down *3 times since 1995 in a way that could have justified the 300% rise in house prices in that time.

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i've always maintained we had an oil bubble for the following reasons:

we don't know anything about oil supplies that we haven't known since the early 70s

we don't know anything about forecast demand from growing users that we haven't known since the 70s

oil inventories in the US have only been closely watched for the last year but they have had a massive impact on prices

we continually see prices justified 'on concern that'

i remember earlier this year when the price shot from $38 to $50 - market reports were that oil gained because of concerns about hurricanes, iraq, industrial action in africa etc. each of these reports seemed to put $2 on the price of a barrel - however, when these didn't come to be, strangely enough the price dropped but never by $2 a barrel - much like a building society dropping its borrowing rate by .1% when the base rate is dropped by .25%

how about this one - they aren't making it (oil) anymore, buy now - well they aren't making land anymore but i will laugh at anyone who tells me i should pay today's price for it

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There are bubbles and there are bubbles. If en masse people were stockpiling oil because it would be more costly tomorrow/next month then yes it would almost definitely have reached a bubble peak. There is a big difference though between these markets, you could quite easily perceive a proeprty market where transactions droppped 50+% in a matter of months, there is no way that that could happen to oil (barring a population wipeout) - it is essential for nearly every activity/product that we indulge ourselves in.

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Yep, the boys who brought us dot.con and housing as bubbles are now bringing us oil, gold and other commodity bubbles.

I bet some of them are even helping to create the bubble(s) in these areas via numerous websites like this.

I doubt it. At least not with oil.

For a start, it is difficult for the average Joe to play the oil futures market in the same way he did the stock market. Get caught out and you could find yourself obliged to deliver or take delivery of a barge of gasoil in Rotterdam or West Texas Intermediate in Cushing when the contract expires!

Secondly the oil futures market only really has five major contracts. The liquidity is concentrated in these and is so huge that it would be very difficult to ramp them the way you could a share in a single company.

Even the oil majors with their massive clout have trouble moving the futures by more than a few cents temporarily to suit their positions.

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But how would you get a bubble in Oil? Its not really an asset as such, as it is consumed.

It may be very expensive now but I can't see Oil companies allowing the price to drop < $50 a barrel - they would just change the supply to make this happen. But by then the world would have got used to oil at this price.

Ok, I don't really know much about this market, but I can't see the predictions of Oil returning to $25-30 a barrel. :huh:

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Just as long as the bubble does not burst until my tank runs dry.. Just filled it and I don't want to be left feeling like someone who bought a property in the last few years...

negative equity.. on my fuel..

Mind you. if you want to see an investment yield high returns I just about double the value of my car every time I fill her up :)

now should I get a loan against it.. spend it on fun and then realise that I actually have to pay the money back..

Does that happen when you release equity...?

I hate it too especially in this time when DebtMatters, people are in so much DEBT that we need to not mention the AIM and small-mid cap companies. Even if they are tipped to skyrocket debt does matter, silly thing to say really because everyone knows DebtMatters.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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