With unrest spreading across the Middle East, and as much as half of Libya's oil production shut down, Nomura Securities is forecasting oil prices will hit $220 a barrel if Algeria sees significant unrest.

I'll take the other side of that bet. I say oil fails at the old high (147) and crashes back down to the 70's, maybe even lower.

Why? Because oil above 120 for any length of time will kill demand across the board. Factories will close, fields won't get plowed, schools and government offices will go to half-hours.... nothing will be spared. There's no slack left in the system to absorb that kind of shock. This is not 1979.

Sorry to be such a wet blanket, but that's just how I see it.

ebear