Hi BBQD -

You have put your finger on the pulse of the current situation, and as far as I can tell, it is impossible to predict:

The supply of cheaper oil supplied to the market is dwindling (Cantarell, Bhagram in Kuwait, The North Sea, The North Slope Alaska are all past peak). Upward force on prices.

The efficiency of automobiles can be expected to increase, with gradual substitution of internal combustion engines by others (hybrids, electric). Downward pressure on prices.

Cheap oil can only be substituted by expensive oil (deep sea, heavy oils). Upward pressure on prices.

The current recession may linger on for a year or two, decreasing the demand for oil. Downward pressure on prices.

From this perspective, you have to predict the intersection price between contradictory trends - a crap shoot.

The U$ dollar I expect will lose values over the next year or two. Upward pressure on prices.

I tend to think that the $70 range is what we will be looking at for 12 months or more: This will allow the multinationals to develop new, necissarily more expensive, sources of oil. Also, I get the feeling that the Saudis like this price level - a Goldilocks price: not too hot and not to cold!