Saturday, June 14, 2008

Hope He's Right

Drawing comparisons to previous busts in the prices of housing and tech stocks, Fortune Magazine editor at large Shawn Tully argues that the price of oil is bound to eventually fall:

We've learned another important lesson from the housing market: The longer prices stay stratospheric, the worse the eventual crash - simply because the higher the prices and bigger the profit margins, the bigger the incentive to over-produce.

It's even possible that, a few years hence, we could see a sustained period of plentiful oil supplies and low prices, meaning $50 or below.

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