Oil Prices Are Falling. Really!

by Mike Solowiow

Published: March 20th, 2008

Is the oil bubble about to burst? Oil prices have fallen below $100/barrel and my dad, who is an oil engineer for Occidental Petroleum, has said prices will probably level off again in the $65/barrel neighborhood. That's where the big oil companies are predicting prices will go during the next six months to a year, too. Whoever predicts when the big fall will happen can make a lot of money playing the market. Demand and supply have been stable for about 6 months. That means oil is trading on speculation only and when they run out of suckers to buy expensive oil, the price will drop to more reasonable levels.

Mike Solowiow

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4 of 14 comments

Robert Schwartz on Mar 20, 2008

"at some point peak oil will become a reality" And at some point we will all be dead. The real issue is, as in everything, timing.

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Ryan Knuckles on Mar 20, 2008

Well stated, Mr. Schwartz.

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Donal Fagan on Mar 20, 2008

There seems to be quite a bit of the sour stuff available, but I think Peak Light, Sweet Crude Oil is already a reality. What seems clear is that we're in an age of energy and climate uncertainty. And the uncertainty, while a boon for traders, is a real problem for the rest of us.

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Ihatetrees on Mar 20, 2008
There will always be oil in the ground as long as humans are around. There is plenty that will simply always be uneconomic to produce. Yup. And those with the expertise to get it will be rewarded. I think Mike's piece is a little optimistic about the price, unless we enter a prolonged recession. On the other hand, current fed [s]inflationary[/s] monetary policy may mean oil priced in dollars will be pricier.

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