I think we are at a point at which oil conceivably has two very different possible price futures. I could see the price go upward: amid deteriorating circumstances in the Middle East, the continuation of rising demand in the developing world, and the inevitable recovery of high-consuming, advanced Western economies, i.e. inflation, that will arrive sooner or later. Alternatively, I could see a significant drop in the price, as well. In fact, I could see a sustained fall in the price, chiefly due to the recent reports that the “US will overtake Saudi Arabia and Russia to become the world’s largest global oil producer by the second half of this decade” (source). While there is some skepticism as far as how significant the US oil ascent will prove to be, I can’t help but think that simply coming close to the estimates is significant enough. In sum, there are reasons to anticipate both higher and lower energy prices going forward, depending on how events play out.
The price of oil 2005 to Oct 2012: