Oil prices jumped up $6 yesterday based on a report that oil prices are going to, well, go up. It seems like a self-fulfilling prophecy to me. However, CNN says the recently end of the housing boom is a good sign that no bubble lasts forever. With China and India subsidizing oil prices to keep consumption up, it's driving up the prices worldwide. However, the world is already starting to react to high prices. Gasoline consumption is down, GM is shutting down several of its SUV assembly lines, sales of hybrid vehicles are up and less people are flying. Stephen Brown, an economist at the Dallas Federal Reserve, said, "Historically, the oil market has under-anticipated the amount of conservation brought on by high prices." So just like in the housing market, oil production is going to jump up just as consumption eventually drops down, leaving a surplus of oil in the market and dropping prices. Until then, energy traders are reaping the profits of $125 oil. Enjoy your meal while it lasts, boys. –Stephen Payne, Editor, Oil and Gas Investor This Week; www.OilandGasInvestor.com; spayne@hartenergy.com
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