Is Surging Oil Just Another Bubble?

Is Surging Oil Just Another Bubble? - at www.moneyweek.com - the best of the international financial media

Bubble-watching has been a popular spectator sport all year - commodities, China / Asia, Google and real estate have all been widely associated with unsustainable price surges - and now billionaire publisher Steve Forbes is entering the fray. Oil, he suggested earlier this week: "..is a huge bubble. I don't know what's going to pop it but eventually it will pop - you cannot go against supply and demand, you cannot go against the fundamentals forever.'

One would have thought that it was precisely the imbalance between supply and demand, otherwise masquerading as 'fundamentals', that was driving oil prices higher. The likes of Matthew Simmons ('Twilight in the Desert - the coming Saudi oil shock and the world economy'), of course, would argue that OPEC is essentially lying about supply and that even Saudi output may not be enough to put a cap on prices, particularly in the wake of Hurricane Katrina and her impact on the Gulf of Mexico. 'The Economist' waded in to this debate last week by putting the US and China on its front page as Oiloholics.

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