Will the Oil Bubble Burst? By Justin Fox, Time, June 5, 2008. "Guess what [billionaire Richard] Rainwater did a few weeks ago, right after oil prices topped $129 per barrel? '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.' This news, disclosed here for the first time, is a big deal. Lots of Wall Streeters... have been warning lately that speculation has inflated oil prices into a soon-to-pop bubble. But talk is cheap -- this is something more. One of the biggest oil winners of the past decade has decided to get out... [Rainwater] definitely thinks oil prices are due for a fall. That's why he sold... The bigger question is whether the now nine-year-long rise in energy prices is at a definitive end, and to that, Rainwater offers a clearer answer: No way... One of the things that prompted [his] sell decision was a reader poll on the investing website Motley Fool... Seventy-seven percent of the respondents said they were [dealing with high gas prices by] cutting back on consumption (by driving less, buying a hybrid, buying a Vespa, etc.). Rainwater... took it as a sign... 'I just felt that America was not ready for $4 gas and we would see a pause here,' he says. 'And we are seeing a pause.' But even a sustained turn toward conservation in the U.S. wouldn't affect the main long-term drivers of higher oil prices -- stagnant production worldwide and burgeoning demand from China, India and other emerging markets. So pay heed to Rainwater's choice of that word pause."
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment