Is the Oil Bubble Bursting?

I know, I know, oil prices are stratospheric (new high today of $136 per barrel as I write this) and it's hard to see how it will go back down with increased worldwide demand and finite supply, but just read what Richard Rainwater has to say about the oil bubble about to burst.

Who's Richard Rainwater and why you should listen to him? It's all explained in this article about Justin Fox for TIME magazine:

Eleven years ago, after doing a lot of studying and a lot of thinking, Richard Rainwater convinced himself that the long decline in oil prices that had begun in the early 1980s was about to end. As a billionaire who had made his name and fortune steering the Texas oil riches of Fort Worth's Bass family into lucrative nonenergy investments like Disney stock, Rainwater had the wherewithal to act on his conviction. So he plunked down about $300 million of his own money on energy-company stocks and oil and gas futures.

For a while it looked like a boneheaded move. At the end of 1998, the price of oil fell below $10 per bbl. Regular gas sold for 90¢ a gal. While Internet billionaires were being minted to the right and left of him, Rainwater was getting poorer by the day.

You can guess the rest of the story. The dotcoms imploded; the price of oil climbed, climbed and climbed some more--and Rainwater's energy bet came to look like one of the better investment calls of our time. It has netted him about $2 billion, vaulting him from the mid-200s on Forbes magazine's 1999 list of the 400 richest Americans to No. 91 last summer (with $3.5 billion overall).

So guess what Rainwater did a few weeks ago, right after oil prices topped $129 per bbl. for the first time? "I sold my Chevron," he says. "I sold my ConocoPhillips. I sold my Statoil. I sold my ENSCO. I sold my Pioneer Natural Resources. I sold everything."

Link - via The Curious Capitalist


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Right on Superbad, I agree w/ your theory, & it's beginning to be evident. Do you have any website, blog, or even books of yours or anything that you would recommend?
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Ironically, the US House of Representatives recently passed a bill making it illegal for foreign states to act together to "(1) limit the production or distribution of oil, natural gas, or any other petroleum product; (2) set or maintain prices for such products; or (3) otherwise take any action in restraint of trade for such products. Denies sovereign immunity or act of state doctrine protections for foreign states who engage in such such illegal conduct." The Senate is voting on it in a day or two.

Of course, at the same time, we're artificialing limiting our own production and forcing ourselves to be dependant on foreign states. Brilliant.
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The US has plenty of oil to support itself. It is just our idiotic environmentally greenie insane government will not let us.

GIVE US NUCLEAR POWER!!!
GIVE US OUR OWN OIL!!!
GIVE US MORE REFINERIES!!!

GLOBAL WARMING IS A HOAX CONTROLLED BY ENVIRONMENTALIST AND GOVERNMENT BUSINESSES THAT EMPLOYS MILLIONS AND MAKES BILLIONS EVERY YEAR!!!

DRILL HERE. DRILL NOW. PAY LESS.
http://www.americansolutions.com/actioncenter/petitions/?Guid=54ec6e43-75a8-445b-aa7b-346a1e096659
Over 400,000 signatures already.
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Drill here, drill now. A huge deposit was recently discovered in North Dakota. No pristine wilderness to spoil, and no pesky Cannuks to worry about. Just drill & refine and watch the prices go down. Not for a while, but down it will go.

And speaking of refining, this last Tuesday we just got a step closer to having the first new oil refinery built in the US in 30 years, in southeastern South Dakota. An election was held whether to allow the area to be rezoned to allow the refinery to be built, and it passed by a 60/30 margin. (Rueters article)
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