Lehman Bros. Report: Oil Bust in the Cards

Friday, April 25, 2008 5:56 p.m. EDT
Is $120 oil even real? Not if you ask the Saudis, or even Lehman Bros.

The investment bank’s oil expert said this week that the oil boom is due to bust. Economic growth across the globe will slow just as new refineries kick in, raising supply.

Recession or not, a U.S. slowdown will slacken demand sharply, right as new oil hits the market. "Supply is outpacing demand growth,” said Michael Waldron, Lehman’s oil strategist.

"Inventories have been building since the beginning of the year. We have pretty significant projects starting soon in Saudi Arabia, and large off-shore fields in Nigeria,” he said.

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The article is about a month old

 

I thought that oil would have starting dropping drastically in price before it even reached $100/bbl. Here is an opposing view to the oil bubble one. Only time will tell which one is correct.

www.nytimes.com/2008/05/12/opinion/12krugman.html?_r=1&oref=slogin