Sophisse

The Oil Bubble Will Meet the Same Fate as Tech, Housing

There is a significant difference between the oil price rises and the other bubbles you mention: oil is not an asset. Internet stocks and real estate are both assets, in that they are not consumed. When I buy them, I can't use them, I need to either hold them for their revenue stream or sell them to another investor.

Oil is not an asset, it gets used up by the final buyer.

Oil futures are assets. A bubble in oil futures would qualify as an asset bubble. But since oil futures expire into actual oil, such an asset bubble would necessarily be pricked at expiration time. For bubble students, this maps to the dutch tulip bubble centuries ago.

I'm not so naive as to suggest that futures prices have zero effect on spot prices, but the non-asset nature of oil is a critical aspect of this price rise that needs to be addressed by any bubble theory.