November 8, 2008

Crash of 08 and Energy

Nate Hagens of the Oil Drum:

"Those who rationalize the recent crash in oil prices as evidence of an oil bubble are only partially correct, and miss the greater point entirely. We are in the midst of a global deleveraging of an enormous bubble in financial assets, of which oil futures contracts, is just one. ... [R]ecent events in the real economy have put us in the liminal space where drops in demand will temporarily exceed drops in supply. Our energy future is a battle being fought between depletion and investment/technology in a world that is not only interconnected and complex but increasingly fragile. Counterintuitively to most, the lower oil prices go and the longer they stay below $80-$100 per barrel, the steeper the fall off of the crude oil plateau will be, and the dimmer our energy future." 11/12/08

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