Hi Sharky:

Two elements will ultimately cause oil to go up measured in US$. The first is demand. As oil becomes shorter in supply, causing the move to different forms and sources ( more heavy crude, etc), price will go up due to higher input costs as well as incremental processing costs. Secondly, they will be going more to heavy oils due to lack of availability of light sweet crude. The strain on availability of light sweet will also cause that component to increase in price.

Secondly, in order to fill demand we wil have to in conventional petroleum go to deeper and deeper sources. This will also place extreme cost pressures which can only be alleviated by price inreases for the commodity. So on all fronts, increasing demand which can only be met by utilizing more costly inputs to supply an increasing demand for product, will result lt in increased price.

Then, one will have the impact of a weakening US$. The true victims of this component will be those people living in the US and likely Europe. As the $ and Euro decline, most other currencies will strengthen. Result, people living in the developing world will find less impact from higher fuel prices due to their strengthened currencies. We in the US and Euro Land will lose in all directions.

The only option for we in the West will be to be situated in the right assets so we can benefit from what will be the increasing value of those assets in our own currecy. And those are the so called "hard" assets. Going to take intelligent planing and a decent amount of good luck.

Brian