Comment; Interview of the week.

Byline: JEZ DAVISON

IN a volatile marketplace dominated by greedy speculators, JEZ DAVISON asks: How much longer before the oil bubble goes pop?

THE sound of the oil boom is building to a crescendo. While some analysts predict it will deafen us for a while longer, others are covering their ears in anticipation of an almighty bang, the like of which has not been heard since the dot.com crash at the turn of the century.

The two eras are underpinned by one common denominator: speculative investors with wads of cash to burn.

In the late 1990s, they backed almost anything described as 'hi-tech' or ending in '.com'. But despite being hailed as the saviour that could prolong UK and global economies, dot.coms went from heroes to zeroes in just two months.

The crippling speed of the decline was attributed to a sudden realisation that companies worth millions on paper had no substantial assets at all. And who were to blame for these inflated values in the first place? You guessed it.

And now the speculators who controlled that market are back, only this time they have a more dangerous toy to play with.

Once again, some traders are making mind-boggling profits by betting on the direction of oil prices, which has inflated the market and increased the likelihood of a crash. But the difficulties surrounding the oil boom are more complex than the busted flush of the dot.com era.

Firstly, we need oil - a basic commodity that influences fuel and energy prices - far more than we ever needed to book holidays online.

Secondly, prices are being sustained by continued high demand and a supply shortage of refined oil exacerbated by the technical difficulties and expense of extracting much of the black stuff.

Traders cannot be blamed for that. But having seized control of a staggering 71% of the futures market for oil, they can be blamed for aggravating the situation. It is estimated that prices would plummet from EUR140 a barrel to EUR65 if speculators were taken out of the equation.

History tell us that the bigger the bubble, the louder the bang. And while investors won't turn their back on oil in the same way they did with dot.coms, the scale and fall-out of this boom and bust cycle could be much more damaging.