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Is Oil a Bubble? Part Two

Roger H., the answer to your question is, "There is no black goop." That was Masters's point: the 848 million barrels exist only on paper contracts. Because index speculators roll their contracts every month, the paper is never converted to black goop, just longer term contracts that have, so far, been increasing in price. In the oil biz, that's called contango. This is a good time to remember Stein's law: if something can not go on forever, it will stop.