The Oil Bubble

When I am sitting in a donut shop and someone starts telling me over a donut and a cup of coffee that he is making all kinds of money by investing in oil futures. Then tells me it is like shooting fish in a barrel. This kind of talk gives me the "agita!" This may be true, but I suspect that an awful day of reckoning is coming to this gentleman. It is long overdue not only to him but others of his ilk.

According to Gibson Consulting it only costs $7.35 a barrel to produce petroleum on a world average. So how come is it that the price of oil per barrel is reaching the sky or higher. Somebody is making an obscene profit, and this sounds like a bubble to me! Anybody out there who has any tulip bulbs for sale!

"Shades of the Tulip Bubble indeed!"

Mankind always rises to a challenge like this, and at this point there are too many brains working on the solution to this challenge. Obviously one of them is Flex-Fuel whereby you are not limited to one source of energy, but several different sources of energy. Flex-fuel is a mixture of gasoline and methanol in any ratio.

Our world runs on energy the United States uses 21 million barrels of oil a day. It doesn't necessarily mean that that energy has to be a fossil fuel. There are any numbers of approaches available to supplant oil. Methanol is one viable approach either alone or as a flex-fuel where methanol and gasoline can be intermixed. All it is going to take is a breakthrough on the energy front that many people are working on now.

One of the recent developments announced just this month is the oil play discovered in the Bakken formation in Montana, North Dakota, and Saskatchewan Canada. This one formation contains more three times as much oil as there is in the entire middle-east. It has been revealed that this one oil field contains over 503 billion barrels of light sweet crude.

Anytime that the price of a commodity rises rapidly such as oil is doing now is just another way one can tell that there is an economic bubble as the driving force behind the sudden price rise. This is especially true when there is really no reason, like now, behind the bubble.

At a very conservative estimate oil should be on the market for less then $50.00 per barrel. What drives this bubble, or any other bubble is just plain greed. Although the greedy can make life difficult at times, just remember there is always a day of reckoning too come.

Learn more about this author, John Carter.
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