FeverBuster

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

Oil bulls need to realize that as oil price rises, any cash profit they make in realized value decreases over time. Since oil contributes to inflation when it goes up, it essentially erodes the profit that you are making. Inflation becomes the check and balance for oil pricing. So, a dramatic price drop in oil to get inflation back in line would allow the market to explore higher prices once corrected in the future.

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

christletoe,

The last report from the EIA on gasoline indicated the opposite from you claim of being at an all time low and on the verge of shortages. Please post a reference for this claim.

Additionally, with oil being at an all time high, inventories have to be managed better to hedge against potential price drops like what we have seen in last few days. The higher the price of oil, the less the demand, and thus the less inventory needed as buffer. As the demand goes back up, so will inventories.