Redstate

Posted at 10:23am on Jun. 28, 2008 Fearing the End of High Oil Prices

Bubbles Always Burst

By blackhedd

One of this week’s big themes has been the role of speculators in the crude oil market. I’ve certainly played my role in the mini-flap. It’s absolutely true that buying pressure from non-traditional players has been supporting the price of crude oil, but the real picture is considerably more complicated than the one Barack Obama and the MSM have been retailing.

In short, there are a great many professional investors out there who now think of industrial commodities as an asset class, to be given its proper allocated weight in managed portfolios. This is where much of the structural price support for crude oil has been coming from.

And this has been giving me some very spooky thoughts.

Commodities prices are undoubtedly in a momentum-driven bubble. Months ago, I predicted in this space that crude oil would hit $150 or $180 a barrel during the summer.

Hold onto your hat and keep reading…

Posted in Dodd-Frank | Economy | institutional investors | oil pirces | speculators — Comments (20)/ Email this page » / Read More »