Both the effective US Dollar devauation and the increasing supply shortage due to increasing consumtion by the industrializing world are factors impacting the price of oil. Until and unless the US returns to fiscal policy sanity that portion of the equation will continue to adversely the price in US$ denominated terms. The correlation of the US$ depreciation versus the cost of crude is convincing.

In citing this, I do not dispute the relationship of the increasing supply shortfall. Ultimately, if both of these factors are not addressed, we will see a synergistic increase in the price of oil predicated on the compound effect of both of these elements!

Brian