Oil Prices Rising Rapidly
I recently made a prediction that Oil would top $90 a barrel in 2006 and that we'd see $3 gas again. Now that I've had time to think about it some more, maybe I was being overly optimistic.
CNN Headlines are today reporting that oil futures are at the highest levels in over 3 months, based on concerns of IRAN and civil unrest in Nigeria. If these issues continue to fester (almost a certainty), we could easily top our previous record of $70.85 (set the day after Katrina) within weeks or months.
Bloomberg is even reporting we could see $100 oil if Iran decides to reduce their production. Think about it... Iran is being threatened by the world for their Nuclear ambitions. Soon the United Nations (a spineless, do nothing debating organization) will issue a couple of dire warnings and resolutions. Iran will probably laugh off these warnings and it will then be up to the U.S. or Israel to make IRAN abide by the resolutions.
What do you think the likely outcome will be? Let me give you a hint: Israel is not about to play games with a radical leader who seeks to wipe them off the map, and even though the U.S. military is spread thin (with Iraq and Afghanistan) it still has enough Airpower to knock IRAN back to the stone age.
If this scenario happens, what do you think will happen to the price of oil? I personally believe it's wise to start seriously thinking about the loss of IRAN's contribution to the world's oil supply... and we thought $3 gas in 2005 was bad!
If you want to read more about a possible doom/gloom oil scenario, I recommend this link.
So, where will an oil crisis leave the U.S. consumer, our housing bubble, and the US economy? Extremely vulnerable my friends... I hope our economy can handle the serious shock that may be looming on the horizon.