What goes up must come down?
Saw this really interesting write-up on oil prices in the Newsweek and though i'd share it here and get your views. Some of the interesting theories/thoughts of this writer are
1. Surging oil prices are leading to "Demand destruction" in some of the largest oil consuming countries.Until late 2007 the rise in oil prices did not pose a problem for the global economy, as it largely reflected booming economic demand in the developing world and a steady situation in the United States. But over the past six months, the price of oil has risen at its fastest pace in recent history, even as economic demand has slowed.
2. All price setbacks in oil over the past three decades have been demand- and not supply-led. Still, the oil bulls are willing to ignore evidence of demand destruction and are instead obsessed with supply issues.
3. So, why are oil prices rallying so violently of late? Well, because that is how markets typically behave at the final stages of a powerful bull run. Prices get disconnected from fundamentals and enter a blowoff stage as everyone wants a piece of the action.
4. Of late, the world seems split between oil and non-oil nations, with all the producing economies booming while their consuming counterparts are threatened with oil-induced stagflation, meaning slowing growth and rising inflation. However, there is a limit to which the fortunes of the oil-producing and oil-consuming nations can diverge. With evidence of demand destruction mounting in oil-consuming countries, it will not be long before the term "peak oil" invokes images of a peak in both the price of oil and its demand, rather than fears that the world is running out of oil.
gravitational pull is down, not up, sorry :)
Gravity :O
"There's good in everyone, sometimes people just get diverted to the wrong path"
Haa Darude i m sorry
The only positive I see out of the situation is that we seem to be in the right place at the right time!!!
There is talk of a reversal of globalisation and move to regional trade( too expensive to ship goods and services), serious changes in balance of power ( oil nations policing the world?) and less than tranparent corporate practices( russian oil barrons owning large corporations), when oil hits 200$.
I only hope people remember that there's a fuel that's cheap, clean and readily available, and it's called conservation!!!!
You can also Tune a piano, but you cannot Tuna Fish!
Hari..people are talking about oil reaching 200US$ a barrel. So when does the bull run stop ? or is all BS.
the anchor always went down and then came up.
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