I think we've run out of metaphors for crude oil. At this stage of the game it's rocketing like a spaceship, but even that image fails to do it justice. I really believe this is as nuts as anything we lived through in the late 1990s. Well, not everything, but I bet crude oil predictions take on an eerie similarity to the Internet stock price sweepstakes that defined the dot-com boom.

It's only a matter of days, maybe hours, before someone predicts crude oil will reach $250 a barrel. Do I hear $300? Without a doubt you will.

Ironically, one of the things that keeps it going is the collective discussion of how goofy and illogical it is. The stock market isn't cut and dry, black and white, rational or irrational. The market doesn't make sense all the time; some might say it doesn't make sense most of the time.

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Crude oil is so far off the charts it could retrace to $125 and still hover well above its key moving averages, or freefall to $95 and only tickle its 200-day moving average. 


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This lunacy isn't going away soon. Is  there anyone out there that wouldn't be a buyer of crude on weakness? Unlike the old Internet hype, there's more than a modicum of truth to the hype in crude. Ironically, a lot of hot oil and energy stocks stumbled yesterday. That said, I still like Transocean (RIG) and Weatherford (WFT), especially if they could be had cheaper.

In a strange way, hype is just paving the way for the inevitable. Logic is at work here, it's just been hijacked by hysteria. And logic dictates that at some point -- perhaps over the next few years (or months) -- crude will hit $200 a barrel.