Oil Contrarian Sees Bubble Bursting

Even if the guy below is right…how would you know when to buy or sell:

“Most energy analysts on Wall Street expect oil prices to remain high for the foreseeable future because of strong demand and limited supply. Then there is Tim Evans, a contrarian who says today’s crude oil prices above $50 a barrel reflect nothing more than a market bubble fed by speculation and unwarranted fear. Evans, a senior analyst at IFR Energy Services in New York, believes oil prices could plummet to $28 a barrel as early as this summer. “I guess that makes me the lunatic fringe,” Evans said, followed up by a burst of laughter. Evans’ basic message is that the world’s oil supply is sufficient to meet demand, that motorists will soon show that they’re not willing to pay any price for gasoline and that the market is unreasonably receptive to worst-case-scenario thinking…Evans scoffed at the Goldman Sachs report, saying “the probability of reaching that price level is so small it’s, like, laughable.” “Yes, $105 could happen. Texas could slide into the Gulf of Mexico. There could be a nuclear war with Iran. But you know that in a scenario like that I somehow don’t think the world economy is going to be screaming for more oil.” Evans is not the only contrarian — there are still a handful of analysts forecasting prices below $40 a barrel in the second half of the year — but he may be the most blunt voice of opposition to the bullish market consensus. He sums up the group-think this way: “Greed makes you stupid.” When asked why the market would ignore what he considers to be an adequate supply situation and instead focus on everything that could wrong to disrupt it, Evans answered with a question. “Why did people chase Internet stocks in the late 1990s, and why did they shift from looking at earnings to looking at revenues and from looking at revenues to looking at the number of hits on a Web site as a method of valuation?”
Oil Contrarian Sees Bubble Ready to Burst
Associated Press
Monday April 4, 5:48 pm ET
By Brad Foss, AP Business Writer

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