Oil losing steam

Speculation in crude oil and other energy commodities has clearly been losing steam, and this is despite all the zany "stories" that sleazy promoters have been concocting to stimulate inflows into commodities trading and speculation, everything from Peak Oil, China, India, Iran, and even Lebanon. And, the declines have been in spite of some real disruptions of supply, such as BP in Alaska, Nigeria, and Iraq.

Sure, we could see another bounce-back in the price of crude oil at some point, but the simple fact that a super-safe T-bill will earn you 5% takes a lot of wind out of the sails of the speculative promoters that was there eighteen months ago, a year ago, or even six months ago.

The big problem is that a lot of people put money into crude oil speculation over the past three months at price levels that leave them sitting on significant losses. Ouch. That provides a lot of negative PR for the crowd that was claiming that energy prices "can only go up."

It may still be too soon to call the end of the "bubble" in commodities speculation, but the bubble is certainly looking somewhat deflated.

-- Jack Krupansky