Oil price models manifest confirmation to deflation theory – oil below $30 a barrel, Dow below 4000?
Peter Oberois
Mar. 12, 2007

The analytical models tracking crude oil prices are sending warning signals for the economy. The crude oil future market and its derivatives are forming the long-term tops and cyclically are ready to collapse to levels unimaginable. Oil bulls are looking for $100 a barrel because there is no substantial new supply. But the problem is that the world economies are headed for depression.

The build in deflationary pressures from the real estate bubble burst in US, Yen’s forced rise from extremely undervalued levels, China and India’s potential hyperinflation is creating a scenario where the world economies can eventually collapse into deep recession if not depression.

In that case the shortage in supply is overtaken by collapse in demand. That is normal if you can believe the world is experiencing bubbles in china, India and US as far as the growth and stock market rises are concerned.

If the markets experience deep global recessions or depressions, oil price bulls may be trapped for a long time. Oil can collapse very easily to $30 or below a barrel. The oil price cycles point to that kind of price adjustments. The fundamentals from economies and bubble bursts confirm that.

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Oil price models manifest confirmation to deflation theory – oil below $30 a barrel, Dow below 4000?
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