Less than three years ago, I told (more like warned) few peoples, friends and my family that sometime in late 2004 or 2005 we would be seeing an end to cheap oil, or at least the end of abundance of cheap oil and we would be seeing an average $1.80-$2.00 per gallon in the USA by 2005 in most places. My prediction/warning was made just prior to the start of the Iraqi war. It wasn't just a gloom-n-doom scenario I was making up with, it was something that I observed from various geopolitical affairs and its long-term
impact on energy/oil production and distribution between nations.
So far since the beginning of last year, my prediction came true, as a matter of fact. 2005 was the final year of cheap oil and we will not be seeing $1.50 per gallon or less from now on in the USA. From that point, we'll be seeing $2.00 and above per gallon depending on the availability of supplies in the nation (export/import), barring any major energy disruption, geopolitical impact, a major war or a huge terrorist attack on oil facilities in the Persian Gulf.
I'm just expecting a temporary spike of oil price ($95-$100 per barrel) sometime early this year, not a gradual spiking throughout the year, based on the Goldman Sachs analysis last summer. I don't know if it has been since revised but given the recent circumstances regarding Iran, this might be it. The threat of Iran's bourse exchange and the switching of petrodollar to petroeuro by March is a critical issue here, adding the general election in Israel at the end of March may affect the outcome of a possible confrontation against Iran or not.
Now Sharon is in the hospital, under a serious emergency health matter, it could be a sooner-than-you-think circumstance regarding Iran.
It is not about whether there are still plenty of supplies around to keep the oil price at $60 per barrel or less, it is a question of whether all the world's oil supplies and its production/distribution would be seriously affected by a burgeoning geopolitical meltdown by certain sovereign parties over certain controversial issues.
Nevertheless, in my conclusion, the triple-digit oil price per barrel is just right around the corner, at least for a short-term outcome. How soon we get there remains to be seen.
ADDENDUM: When I predicted the end of the abundance of cheap oil in 2003, I did not know anything about Peak Oil discussions or this website until I joined here last year
. Most of my observations were based on reading newspapers, periodicals (Time, Newsweek, US/World News, etc), and Internet forum discussions but definitely not Peak Oil stuff I was getting into at the time.