You have been contributing good stuff on this subject too, asdf, thank you. But just for consistency (and any future googling purposes), could I suggest you change your title, so it reflects your own series, and keeps Jerome's series separate? Thanks! (And keep the articles coming...)

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia

I think if you check the figures for all successive months (f.e. here), what emerges is that analysts basically have no clue: the price for later delivery basically moves with the front-month price. There is a slight linear increase into the future, that's all.

Repeating my own bet, I tip $60 at the end of the year - because I thought (and feel vindicated by the present lower price) that we'll see the collapse of a speculation bubble atop the supply/demand problems price rise, and then another rise in the winter. I tip that $100 oil is still one or two years away. But the real crisis will be $300 oil - which (if present policies won't change radically) comes at a point I earlier debated with kcurie, who persuaded me to put it at a later date (five-ten years from now).

_{*Lunatic*, n.
One whose delusions are out of fashion.}

captures the economics of competing technologies, and the dangers of cartels.  

We recently saw from Chris K how budding entrepreneurs can create incredible solutions to the energy problem.  but this cartel creates an incredible problem for them, and for governments.  Are these entrepreneurs trying to create technologies that compete with a comprilble energy price of $20 per barrel, or with $100 per barrel.  If it's under $50, these guys have wasted 10 years of their lives, and their investors have lost everything.  Somewhere above, may be a winner.

I almost would like to see a diary, or debate, on this, because I think we talk past each other on this point.  I mean, why do you think there is all of these new IT technologies and health care technologies, but nothing really in energy.  

Unfortunately it's complicated, and Jerome, chris k, and asdf try to get to the issues, but as a group, I don't think we are gettin it.

Thanks for the update and the neck sticking out...
I think you underestimate some points:

• OPEC has a cartel still has the power to bring prices up (by withholding supply), but no longer to bring prices down (by putting more supply on line) - because they simply do not have the extra supply anymore. Thus Saudi Arabia's position as an "ally" or America able to regulate prices is dead, and OPEC just becomes an adversary. They are desperate to supply more now, for fear that extreme measures will be taken agaisnt them. If they aren't (producing more), it simply means they cannot;

• oil production prices are increasing - the marginal cost of oil is becoming increasingly expensive, as I diaried back in September (sorry, cannot find the link right now), and new technologies will be more expensive if environmental constraints are properly taken into account. Plus, most of the new technologies will simply not be available in the kinds of volumes we require;

• I think you also underestimate to what extent our current civilisation depends on cheap and plentiful oil. It's not just cars, it's the whole supply chain (trucks, primarily - harder to put on electric), it's our whole agriculture, it's the way new housing is built (far from city centers, not dense enough to make public transportation viable, without local access to shopping) and the whole car = freedom association.

In the long run, we're all dead. John Maynard Keynes