Yesterday we asked readers if they thought oil would hit $150 or $110 first. As shown in the chart below, 58% of the 366 respondents think oil will head lower and hit $110 before it hits $150. Typically at peaks, bullishness is extremely high and not low as it has generally been for oil during its run-up. But the psychology is definitely different when most consumers want something to go down (oil prices) instead of up (stocks, real estate).
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Oil has become a completely detached from the fundamentals momentum play bubble.
It will eventually pop. All bubbles pop and this one will pop too.
It is amazing how many intelligent people (probably under the influence of endorphins in their circulation that were released secondary to excessive overstimulation of their greed receptors) are in denial and rationalizing about “the fundamental demand story behind oil prices”.
Did demand increase or supply decrease by 70% this year to justify 70% increase of oil prices?
Oh, I forgot, it is different this time...
Posted by: Mike | July 22, 2008 at 09:25 PM