Commodity Bubble Proponent

Oil Futures Market: Unwinding the Bubble

Nice piece...you should also point out that a large portion of the "run-up" in oil costs was due to the fact that guys like Transocean, Diamond, Schlumberger, etc. were getting ridiculous profit margins on their rigs. Once more of these things get built, the cost of production will naturally go down.

Oil rig builders do not need 50% IRRs to justify the development of new equipment.

Is the Commodity Bull Market Over?

We haven't topped out yet. But we're getting close.

Some interesting signs:

1. Iran has doubled the amount of crude oil sitting in tankers waiting to be delivered, creating a ship shortage (20 million barrels as of today). If demand was so hot as everyone is claiming, that should be gone.

2. Saudi Arabia just cut it's benchmark discount on all of its varieties of crude. Why would they do that if the demand was as hot as everyone claims? (source: Bloomberg)