An oil bubble?
Oil prices have “run up too far too fast,” says Irwin Kellner in MarketWatch, and yesterday’s decline “could be the start of something big.” First of all, there is neither a “shortage of oil in the markets” nor of the “capacity to refine it.” And “unless the temperature takes a sudden dive” in the Northeast, “the price of oil will” for sure. But it’s bigger than that. OPEC’s 35 years of price increases has led to new sources of oil, and now OPEC’s share of U.S. imports is “little more than 40 percent,” from 70 percent in 1972. Add to that “alternate fuels,” our move to a service economy, and greater conservation, and you get “bad news for oil.”
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