Take your pick when it comes to 'theories' re the POO.
Doesn't look to me like falling below $40 - even at that 'conservative' figure analysts will have to revise their sums re. the oil producing companies which will need to have their valuations increased upwards.
It takes a while for the 'penny to drop' that valuations based on $25-$30 for a barrel of oil are anachronistic.
The reason for oil's long term uptrend, as I see it is pretty simple: expotential global demand spearheaded by demand from China and India. This undergirds the big picture uptrend for oil imo.
Other factors (as sumarised by Gavin in the original post on this thread) will continue to cause volatility spikes and corrections in the POO.
And of course, there is the "fear factor" (very real imo) relevant to a major terrorist strike which could severely disrupt supply to the West.
But .... all said and done ... it is burgeoning global demand (and the higher costs of extracting light sweet crude from existing 'old fields') that is the reason for oil's primary uptrend.
And while that trend is in place, stick to those quality oil stocks and ride this 'tsunami', if you have the courage for, I fear it will be one wild and turbulent ride.
