Oil Bubble.How high can oil prices go?
Are we facing an oil bubble?
Most probably yes.
Traditional and most bsic economic principle says demand and supply determine prices in an open and unregulated free economy.
But oil prices tend to be a speculator dream!
For instance when Iran said it would cut supply of oil it gained a few dollars per barrel.Now this may be a simple speculation.
Most oil producers contries make a lot of money out of something that costs lets say 20-30 dollars and sell it for 125.Of course to determine true or intrinsic value of oil is a tough task.
We should turn to alternative sources of energy such as solar,wind and even nuclear.
Then oil should easily drop a lot.
Remember that in trading what goes upso fast comes down even faster.And fall is much quicker and of course more gains to offer.
When everybody is bullish on oil then a short or ong term peak is very near.Because if it goes to 150-200 as predicted by some large investment firms then they should have heavy exposure in oil companies.
Do they have?
The money blog
