One thing to throw into the mix - we should also keep in mind that the IEA (the Paris based outfit, not the Washington one; I get them mixed up) came out last week with a report to the effect that reserves are being depleted twice as fast as they calculated three years ago.

So it is a race then - dropping reserves vs. slowing consumption.

In the long term, the cost of energy will determine the viability of alternatives. If oil goes too high, arrivederci alternative energy sources. The question is "What price of oil will trigger alternatives?"

I would guess something in the range of a hundred bucks or so - the present price of &0 seems only to draw out various types of subsidised alternatives, which are not a long term alternative.

There is also a time lag factor - although $150 oil will provoke a wave of alternative energy sources, it will take some time for them to become a factor in the market. This I feel will only be a transitional situation; eventually - as the number of electric cars increase over time e.g. - the price of oil would again subside.

Bottom line - we are headed for a steadier pricing market for oil, and a higher one than at present.