The Oil Drum

Hi Nate,

So, you're guessing slightly less volatile than '07? My guess would be it increases in '07.

Unless, of course, we collectively (or individually, with some sum total of results) manage to steer things in a different direction.

Whilst economic depressions have historically caused reduced consumption, oil usage, and hence oil prices. In this case oil and gas appear to be driving economic and financial developments. (more akin to the 1970's oil shocks)
http://inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_P...
The source of the credit/equity bubbles, can be reasonably attributed to oil dollars being invested back in OECD countires, substituting export goods exchange by debt, and asset buy out, propping up the formerly productive economies of US/UK etc, with equity released consumer spending.
The turning point over the last year has been reached as a result of the worlds energy budget flattening if not falling. Economic production, consumption, profit, can nolonger rise at 2 or 3 % worldwide to maintain the interest payments on the mountains of (significantly petro dollar) debt accumulated in the OECD.
Oil and energy price inflation will continue to rise as the gap, between the required growth to fulfill the percentage returns on assets and the available energy, widens at an increasing rate.
With a 5% gap between growth forecast and actual oil production by the end of 2008, I would see an oil price reaching 150dollars by year end, with a minimum of 85$ a barrel near the start of the year.