James Crandell and Adam Robinson of Lehman Brothers wrote that the upward slope of the futures curve suggested that the markets were being swayed by the prospect of “peak oil” – the start of an irreversible decline in oil supply.
They wrote: “The fundamental arguments being put forward for rising prices today are that demand, particularly in the non-OECD, will continue to grow robustly at the same time that oil production is “peaking.”
However, they added, they rejected the argument that oil had entered a new era after 130 years of boom and bust cycles, and suggested that prices would fall, “perhaps violently”, by the first quarter of next year.
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