The Motley Fool's energy bureau chief, Joel South, spoke with Michael Levi about his new book, coauthored with Elizabeth Economy, By All Means Necessary: How China's Resource Quest Is Changing the World. As the David M. Rubenstein Senior Fellow for the energy and environment at the Council on Foreign Relations, Levi is no stranger to the impact that countries and their decisions have on the rest of the world. In fact, Levi also writes a blog for the CFR, Energy, Security, and Climate, where he discusses the relationship between energy, the world, and its inhabitants. In By All Means Necessary, Levi analyzes the impacts and effects China's resource hunt has on the world and international affairs, specifically looking at the synthesis of economics, security, and politics.

In this segment, Joel South asks Michael Levi about trader's fear and oil prices before the Global Financial Crisis. Levi offers a response steeped in the global market and pinpoints market fundamentals.

Joel South: Right before the financial collapse, you saw oil prices upwards of $150 a barrel, and now they're lower. Do you think that the reason they were so high was more just fear -- the trader's fear?

Michael Levi: No, I think that most of that rise was driven by fundamentals; strong Chinese and other demand, but not matched by a strong supplier response, particularly in the Middle East.

I think the last leg of that was probably driven in part by fear and by market activity that reflected that. But most of it had pretty reasonable grounding in fundamentals, which helps explain why we've given up some of those gains, but nowhere close to all of them.

Click here for the entire interview 

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