Still Laughing

Bye, Bye Oil Bubble?

To all the speculators who are sure that we're not in a bubble because oil has a finite supply, thank you for stating the only one half of the obvious. Unfortunately oil is a form of energy with substitutes. Speculative pricing rests on future cash flows. If the price becomes too inflated and invites substitution, oil will crash hard. Oil is OIL because it is the cheapest and most efficient form of energy on the market today. Remove that, invite research on more effective nuclear fission/fusion and renewable energies and more effective batteries and oil becomes irrelevant and worthless except to the chemicals industry. As energy, it is simply a substitute good. That's not wishful thinking, that's the same economics book you are reading for when you trumpet lack of supply as the reason we're not in a bubble.