Update [2007-10-17 21:14:10 by dada]: recommended reading: jerome’s outstanding work on this issue at eurotrib
how’s that war for oil working out? depends…if you’re a big oil buddy of cheney, pretty damn well, if you’re a consumer, not so much.
oil reached an all time record high today with fears of additional unrest in the ME driving the price to more than $88US barrel.
according to the energy department, today’s high passed the previous all-time inflation-adjusted record reached in 1981 when Iran cut oil exports. The cost of oil used by U.S. refiners averaged $37.48 a barrel in March 1981, or $84.73 in today’s dollars.
more good news below…
not only that, but according to a report in the bloomberg report:
“It’s going to soon hit $90 and go north of $100 next year,” said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, with $700 million in customer accounts. “We should see $150 to $200 oil in the next two to three years because of the drop in the dollar. Once Asian countries allow their currencies to appreciate, demand will explode there.”
l would posit that mr. schiff is a bit more rosy in his prediction than may be warranted.
to but it in closer perspective, let’s go into the way-back machine and look at the price at the start of the war. 19 march 2003:
Monday morning this week, Colin Powell was about to hold a press conference, Pres. Bush would address the nation at 8:00 P.M. The price of oil, highly volatile in this environment, began the day at about $35.50, a barrel. It closed in on $36 immediately, within sight of its all-time high. ABN AMRO, the huge Dutch bank, trades in the oil market for clients like oil companies and big investors. Our first question to oil analyst Jan Stuart: Mightn’t this be like the last gulf war, with prices running up in anticipation of it, only to plunge once it was resolved?
today’s price is 250% of what it was, with no end in sight, and it’s going to hit you at the pump, and in other areas such as heating oil, very quickly:
Also Tuesday, November gasoline rose 1.62 cents to settle at $2.1737 a gallon on the Nymex, while heating oil futures rose 3.15 cents to settle at $2.3387 a gallon.
Natural gas for November fell 7.8 cents to settle at $7.367 per 1,000 cubic feet after a storm in the Gulf of Mexico appeared to weaken, becoming less of a threat to critical gas and oil infrastructure.
Retail gas prices have not kept pace with oil’s recent rally into record territory, as many analysts had expected. At the pump, the average national price of a gallon of gas rose 0.2 cent overnight to $2.759 a gallon, according to AAA and the Oil Price Information Service. Gas prices are 53 cents higher than a year ago, but have fallen over the last month. That could change, however, now that oil is again on the rise.
“Consumers will now see higher prices at the pump in the coming months and weeks,” said John Kilduff, vice president of risk management at MF Global UK Ltd.
add to this the growing bellicosity regarding iran, the continuing tanking of the housing market, stagnant wages, the US dollar at record lows against other world currency’s, and myriad other factors, and there’s a nasty recession just over the horizon…or worse.
as they say: assume the position: 
lTMF’sA
