Oil price bubble?
Yeah, or so says Morgan Stanley. (Props Cosh)
I don’t buy it. Not that there aren’t trading fluctuations, and sure, less demand from China could drive prices lower for awhile. But trading fluctuations do not place more oil in the ground. It could just be a difference in perspective: I’m interested in the price over the next ten or twenty years, Morgan is probably interested in the next 10 or 20 weeks. And “collapse” is relative too: if you’re leveraged long, $45/barrel might make you bankrupt, but it wouldn’t influence national energy security policies, nor even oil company investment decisions. Oil execs remember $10/barrel like it was yesterday, those were lean years. They no longer assume it might go back there, but “stress testing” investment decisions against something like $20/barrel oil is still required.
As for the “bubble”, I bet Morgan is just short.