George Soros thinks oil prices are starting to look like a classic bubble. His view is that current increases in the price of crude are based more on speculation that any rational balance of supply and demand.
The billionaire investor told The Telegraph "that although the weak dollar, ebbing Middle Eastern supply and record Chinese demand could explain some of the increase in energy prices, the crude oil market had been significantly affected by speculation." He also said a recession in the US and the rest of the West would bring oil prices down sharply.
Soros adds his name to a growing minority report which does not believe that oil will hit $200. A significant number of analysts and industry executives see supply actually increasing with new discoveries in places like Brazil and additional exploration in the US. They also believe that as Asia countries stop underwriting gas and diesel costs, demand will fall.
Soros, now short oil, at least in the newspapers.
Douglas A. McIntyre
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