Fairy Tales Can Come True

It can happen to you…and me, if we’re lucky.

“There’s been a big speculative bubble” in oil prices, insisted Tim Evans, an analyst with IFR Energy Services in New York. The bubble has been predicated on the idea that demand is still growing and supplies are tight.
Fact is, he said on CNBC’s “Power Lunch,” “there really is no shortage of oil” and won’t be until the fall of 2006. The U.S. inventory of crude oil is 10% bigger than a year ago. Refineries are producing 2 million more barrels a day of products than a year ago.
So, oil prices, he opined, are “exploring the top of the trading range,” which is a nice way of saying oil is near a top. And he thinks a big blow-off is coming and may be just starting. How low will oil prices fall?
As low as $30 a barrel is a possibility, Evans said. He wasn’t kidding.

Why does my Magic 8 ball keep saying if oil/gas prices start on their way downward to palatable levels, that building new refineries will suddenly vanish from the collective consciousness?

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