Well though i don't like the rising oil price it's maybe somewhat to early to be on the doom side now.Oil is surging mostly on the fear of a further escalation and not directly on demand though if in near term things are going really badly in that area and there is real slow down in production then we have indeed a great problem.

On the other hand besides these events there was evidence of better economic outlooks .Banking sector was the real worst case of the big trouble in 2008.Now with the help worldwide in that sector most banks are now more stable again and even profits are back.

If oil goes much higher it will put a major damper on World economic recovery..

That's right but if situation will cool down then oil will fall back rapidly.See first spike on the Egypt debackle .Then it drops quickly again.Now Lybia is a greater oil producer but if Kadafi steps down or removed oil can drop again.

Big question is will this stop with Lybia?Of course All Quaida groups will try to take profit of these events and that's not good as well.There are big questions for us in the Western world on how things will rule out there.

As long we in the Western world will be independant from oil as major energy source the smallest event there will course problems on oil price .Because oil price is the biggest subject for inflation it will shock the economics.

This morning oil is coming down a bit after hitting 102.50.

Maybe markets will try to set a bottom around current levels.