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October 12, 2008 4:00:59 PM CDT

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Analysts See Oil Bust Ahead

Posted Jun 4, 08 12:56 PM CDT in Business 

(Newser) – The oil price surge is just like the dot-com boom, analysts at Lehman Brothers tell the Wall Street Journal, and costs will sharply decline once the US dollar strengthens and demand dips in certain countries. Lehman claims oil is experiencing the "classic ingredients of an asset bubble," and points to the "herd" instinct of financial investors in rising prices.

Many in Washington blame speculators for driving the price of oil exorbitantly high. Another contributing factor is the tailing-off of production in some of the world's biggest exporters, particularly Mexico, Russia, and Venezuela. Oil has fallen back after peaking at more than $133 almost two weeks ago.

Source Wall Street Journal

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Lehman Brothers blasted the "herd" instinct that has led investors to jack up the price of oil.   (AP Photo/Paul Sakuma)
One firm sees "classic ingredients of an asset bubble" in the recent rise in oil prices, and predicts a stronger US dollar and other factors will burst the trend.   (AP Photo)
Lehman Brothers compares the run-up in oil prices to the dot-com boom ... and we all know what happened there.   (AP Photo/Bob Edme)
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Russia  • oil price  • Mexico  • Lehman Brothers  • Venezuela  • crude oil  • speculators  • oil bubble


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