The problem isn’t that Charles Schwab chief investment strategist Liz Ann Sonders has concluded that oil prices are in a “bubble” that is going to burst. The problem is in how she arrived at that conclusion. Her methodology raises serious questions about Wall Street’s ability to analyze oil at a time when every investment decision in the world is affected by the crisis in oil.

If a 2006 Bloomberg survey of oil experts is any indication, Wall Street already is handicapped by faulty intelligence provided by the so-called professionals. The Bloomberg survey found that most professionals were expecting oil to fall to $56 a barrel in 2008, less than half its current price.

Still, Sonders’ analysis suggests that the Street may now be trying to analyze oil the same way it analyzes stocks. Virtually every factor Sonders cited in her bubble-will-burst prediction two weeks ago comes out of the financial analyst playbook. Sonders’ logic was that oil prices will fall because, among other things: airlines and autos are getting crushed; additions to the U.S.’s Strategic Petroleum Reserve have been halted; gasoline subsidies in India and China are being lifted; Congress is holding hearings on oil speculators; and there has been non-stop media coverage of the “energy crisis.”

All are legitimate points, but her reasoning completely overlooks the fundamental state of the global oil market, starting with sharply falling production in Mexico; stagnant-to-falling production in Russia; growing indications that Saudi Arabia can’t significantly increase production because of skyrocketing costs and shortages of labor and materiel; sharp growth in domestic demand in oil-producing countries (which reduces the amount available for export); and continuing sharp increases in auto sales in China and India.

Without looking at all the reasons why the amount of oil available for export to the U.S., China, and other countries is becoming increasingly constrained, how solid can Sonders’ analysis be?