July 16, 2006

Thoughts on the Price of Oil

I’m watching the news and it pretty depressing. The world appears to be a tinderbox and the Syrians and Iranians are throwing lit matches around.

However, there was a potential money-making note in the news. They interviewed someone about how high the price of oil is really going to go and, of course, he didn’t know. But he DID say something that I found interesting. He said the current price of oil is NOT drive by supply and demand. It is driven strictly by speculation.

Believe it or not, I found that to be good news. If it is speculation from all the bad news in the world that is driving the price of oil, then we know that at some point, the price will come down. And when it comes down it’ll come down fast. Just as the US Stock Market tanked in 2000, the oil market will tank.

The world is going through some bad times right now. But, just as the good times don’t last forever, neither do the bad times. At some point, the crisis will be over.

Those that are shorting oil futures will make a killing – so to speak. The only problem is timing. No one can know when this will happen. But those that are quick will do well.

Posted by The Vorlon at July 16, 2006 3:07 PM
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