KEY POINTS:
Nine of the past 10 serious downturns in the world economy followed a spike in the price of oil. And we are heading for another spike, with oil near the peak of US$78.40 a gallon that it reached almost exactly a year ago.
A record number of options
contracts are now being sold that entitle customers to buy oil in the future at US$100 ($131) a barrel.
That tells you where the inside players think the price of oil is heading, since those options will only be of value if the price were actually above $100 a barrel. That is the price that Goldman Sachs, the world's biggest brokerage house, predicted oil would reach by 2009.
However, one big negative - further disruption of supplies from Nigeria or Iraq, say - and oil could be trading at more than $100 a barrel by next month.
But the concern is not really about oil prices. It's about what more expensive oil will do to the world economy - and the professional optimists are still optimistic.
The spike at $78.40 in July last year didn't cause a recession, so why should this one? Why would even $100 a barrel cause a global economic crisis, given that one hundred United States dollars today is worth about the same in most other currencies as $78.40 was a year ago?
Oil sales are almost all denominated in US dollars, which are worth almost a third less in euros, pounds or yen than they were two years ago, so the countries of the Organisation of Petroleum Exporting Countries (Opec), are not rolling in sudden wealth.
The oil exporters spend most of their income in other currencies, so from their point of view the recent surge in the oil price only restores the purchasing power that they lost over the past two years because of the US dollar's slide.
More important, most of the big importers of oil in the industrialised world are not really paying much more for oil than they were two years ago.
The rising dollar price has been largely cancelled by the fall in the value of the dollar, so it's not really busting their budgets.
American consumers are feeling victimised, but they get little sympathy in the Middle East countries that dominate Opec, as most of these governments believe that President Bush's invasion of Iraq has made their neighbourhood a far more dangerous place.
Opec is not going to pump more oil out of gratitude for Bush's policies. A price of $76 a barrel will not cause world economic growth to stall - and even $100 a barrel might not do so. But will it stop there? What is most meaningful about the present surge in the price of oil is that it has not been driven by some apparently apocalyptic crisis such as the Arab-Israeli war of 1973 or the Iranian revolution. Neither event was actually all that apocalyptic, in retrospect, but the markets don't do long-term perspective.
We are three-quarters of the way to $100 a barrel without a crisis, driven simply by stagnant production and soaring demand in the big Asian economies.
We could get the rest of the way on a rumour, and the price rise would not necessarily stop there.
The most telling change in the situation is the stagnation of supply, not the rise in demand. New oilfields are much smaller than discoveries in the previous generation (the last really big oil domain to be developed was the North Sea in the 1970s), and they tend to be in much more remote places.
About 70 deep-sea drilling rigs are now being built, almost equal to the total number in the world.
When you have to look for oil at depths of more than 1500m under the sea, or coax it out of the tar-sands of northern Alberta by equally expensive techniques, the era of plentiful cheap oil is definitely over.
Opec is squeezing supply a bit to keep the price high, but its members are pumping close to capacity and only Saudi Arabia is putting in major production capability. Non-Opec oil output is predicted to stay flat for the next five years. It may not really be "peak oil" yet, but at the least we are seeing a lot of phenomena that mimic that time.
If the American mortgage crisis does not tumble the global economy into a recession, Asian demand will go on growing until the oil price does it - at $100 a barrel, if we're lucky - or via a detour through $200 a barrel if Vice-President Dick Cheney decides to attack Iran.