There's plenty of temporary demand destruction taking place as the de-leveraging continues. Some of this demand destruction will enforced by lenders cutting back on the loans it will make, e.g. car loans. While this is taking place then pretty much everything will be hit as money becomes more scarce and expensive. Whether this demand destruction continues will be determined by the economy, if people think the oil price will generally continue to increase they will work from this basis. Unfortunately at the moment few politicians are telling this message to the people, while there are plenty of people saying PO is a hoax, wells are being capped by big oil, plenty in ANWR...

We have seen some bank failouts but IMHO this has not addressed the underlying problems but merely prolonged or postponed the outcome:-(

Minor clarification. I developed the "Yergin Indicator" based on Yergin's November, 2004 prediction in Forbes that oil prices would be back down to $38 by late 2005, as rising oil production forced prices down (where he was described as dismissing concerns about oil supplies with a "shrug."). Of course, basically flat crude production and two years of declining net oil exports forced prices up.

In any case, the Yergin Indicator suggests that oil prices will trade at least twice his predicted index price within one to two years of his prediction. So presumably the CERA/Yergin Indicator suggests that oil prices should be at or above $156 some time between late 2009 and late 2010.

Here is an excerpt of my June, 2007 post on TOD:

RED ALERT: DANIEL YERGIN ISSUES STRONG "BUY SIGNAL" FOR OIL

CNBC just quoted Daniel Yergin as saying that, without the "fear premium," oil prices next year should be down to $60.

Most of you probably recall Daniel Yergin's previous predictions for lower oil prices. Based on prior experience, once Yergin issues a prediction for lower prices, one should expect oil prices to be 100% or more higher than his predicted price, within one to two years of his prediction--think $120 or more within one to two years.

http://teslaverde.blogspot.com/ I have found that there are a lot of uninformed people in this country- especially people in my age bracket. It is hard to get to people my age with all of the distractions we have. I've attempted to make a funny yet informative website that people 18-30 could relate to, who have no previous knowledge of energy. Please pass the URL on to people who you think may learn something... http://teslaverde.blogspot.com/

This will be largely 101 information for your typical oil drum reader (and a bit crass to your older more sophistacted reader)- but if you have a child, grandchild, niece or nephew in the 18-30 bracket you've had a hard time conveying information to- It may help them. I've had a bit of success so far with people I know!