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Old May 11, 2008 | 11:00 am
  #26  
Beckles
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Originally Posted by nsx
It's partly bubble and partly flight from the dollar (later to become flight from the Euro as well). Oil prices are way ahead of the long term trend, as the futures market is telling you.
I'm starting to buy the argument that it is driven more by overall demand outpacing supply.

The devaluation of the dollar plays a role, but even if the Dollar strengthened back to parity with the Euro, that would only decrease the price of oil from $125/barrel to $80/barrel ($125/barrel x 1/1.55 ~ $80/barrel), everything else being equal (which of course, it never is ...).
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