Oil - the past two decades
We remain in a broadening wedge. Upside to $130 would be easily possible, and a test of the 2008 high will be comfortably viable later this summer.
Clearly, a break above the wedge (Twilight zone territory) - currently $140, would be a devastating added cost to the western economies. Right now, even the most bearish case looks to be no lower than $80.
How about $5 Gas, even with lower demand?
What a great summer it could be for the western consumer. We seem to be in another bizarre situation where natural market forces are not being allowed to work. Of course, OPEC rigs the prices to some extent, and right now even minor pullbacks are being heavily resisted. Clearly, the producers want a minimum of $100, and some will doubtless be dreaming of the oft' touted $200+, in the event of a middle eastern conflict - even if it was a brief event.
See this posting by Mish, who gives a great summary on declining petroleum and gasoline usage:
http://globaleconomicanalysis.blogspot.com/2012/03/another-plunge-in-3-month-rolling.html
For regular updates on Gasoline usage...see:
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wgfupus2&f=4
The deflationists are wrong about Oil....so far
Despite the fact that both the EU, and the hugely important manufacturing nation of Japan are now officially back into recession, Oil prices are still relentlessly holding up. A depressing thought huh? It seems that almost nothing will get energy prices lower ever again.
It could be worse though - at least for all those American consumers, who could instead be paying $8.50 a gallon that so many Europeans are already paying. Maybe then they could justifiably whine a little about the price of their beloved Gasoline.
As they say - at least for the moment....keep on trucking !