Oil Bubble?

There seems to be growing speculative fervor in oil markets. This doesn't yet mean that oil is overvalued but it's a yellow flag. Over the past couple of weeks, the oil-bubble debate rose to new prominence as a string of info-packed articles were written by respected and prominent commentators. I am using these articles as starting points for what might turn into a comprehensive exploration - no pun intended - of this bubble debate. This effort seems large. After all, analyzing oil prices in U.S. dollars requires one to take into consideration U.S. monetary policy, and foreign monetary policy, in addition to supply & demand issues, the role of futures trading, the role of commodity index funds, hedge funds and much more.

I've always thought it clear that when excess liquidity is fed into an economically pessimistic market, people would and should get excited about only one thing: commodities. But what if the market were to somehow decide to go gaga over one specific commodity, namely: oil? What if everyone were running after oil just to hedge themselves against yet more increases, thus creating a self-fulfilling prophesy? That's called hyperinflation. Another word for hyperinflation: bubble. For a while it seemed we were faced not only with a potential oil bubble but also a general commodities bubble, but now, especially as the world gradually reconsiders corn-based ethanol, oil is continuing higher even as agricultural commodities retreat. Also, oil is continuing higher while Gold and other metals are not. That's quite interesting and increases the probability that inflation isn't the only cause of this froth.

Here are the articles that I am using as I begin this [probable] journey:
This WSJ blog from 2 days ago
James Hamilton's "oil bubble" post
All CR articles labeled "oil"

There is so much more, a lot of which is linked within these articles. This could be a bigger project than the housing market but if some of the most famous bears are starting to call it a bubble, it's worth it. I'll post more if/when I reach any milestones.