The surge of crude due to a speculative bubble?

According to expert Steve Forbes, editor of the eponymous magazine, the rise in the price of oil is due to a speculative bubble and will burst within a year.

Soaring crude, which briefly broke a record (relative) at more than 70 dollars a barrel, is due to a speculative bubble which will burst within a year, causing a reflux towards 35 to 40 dollars, estimated Tuesday August 30 the expert Steve Forbes, editor of the eponymous business magazine .
Inflation and rising demand from China and India are only a small part of the jump in crude prices, Steve Forbes told reporters at the launch of a conference in Australia.

“The rest is pure speculative bubble… I won't mince my words: just about every arbitrage fund has speculated on oil futures. So I would make a bold forecast… in twelve months, oil will have fallen to 35-40 dollars, ”he added.

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“This is a huge bubble. I don't know what will make it burst but, one day or another, it will burst. You cannot go against supply and demand. You can't always go against the fundamentals ”.

Crash even more spectacular

I don't think the crude price will hit a hundred dollars, but if it does, the crash will be even more spectacular ...

The bursting of the internet bubble will then look like a picnic, ”he added.

Against speculation, Steve Forbes urged the US government to stop accumulating its strategic oil reserves.

“Speculators now know that no matter what happens to the price of oil, Uncle Sam is there to buy, almost every day… Stop buying, and even throw some of that oil on the open market, that would push prices down, ”he said.

Crude prices briefly crossed the symbolic $ 70 a barrel mark on Monday amid fears about the possibility of supply disruptions caused by Hurricane Katrina over the oil-rich Gulf of Mexico.

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Source: NouvelObs

Econology note: Renewable energy projects favored by a high crude oil market will therefore return to their business ... we will be content to meet the Kyoto commitments, which are obviously far too “weak”.

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