This Bubble is a Balloon

Its not like any Tom, Dick or Harry, armed with a drill machine, screwing earth and jet of warm black liquid hitting on the face. Present Oil rush is different from the 70's rush, which ended in an oil glut, on the following counts:

1. Demand has potential to accelerate at much higher pace.
2. Thinning probability of hitting bull's eye. (Finding new wells)
3. Limited E&P players, who know the geology better and thus the limitations.
4. Extra-ordinary high E&P cost.

In the face of snarling demand and dwindling supplies, days of cheap and easy oil are over(yawn...). Commodities as whole have broken loose from the shackles of slavery and exploitation are now venting their ire in the market place. Well, some call it a bubble, but this bubble is well protected by the demand and supply pressures. Also protecting and supporting this balloon is environmental worries.

However, the current spike in oil prices can be attributed to the coming hurricane season in the US gulf. NOAA has yet again predicted an above nornmal season with 2-5 major hurricanes during the season. We are seeing USA hauling up more crude and gearing up for the rainy days and speculators are pumping in money to reap rich reward on account of disaster. During the last few days, some of the over-reaction has recoiled, just to be unleashed at the slightest provocation at later stage.

Our needs are growing into addiction and 'WE and our needs' is the fastest expanding bubble. We ought to adapt to nature and find comfort out there. On the contrary we are building a fragile cocoon around us which does support our whims and fancies at the moment but the day it shatters, we may not be able to face the fury of nature.