Oil over USD135 a barrel

Really entering uncharted territory here for the global economy. No one can say what the implications are with the current price level. Of course we have been here before with global fuel crisis and 'black gold' but it's been a long time now. It's difficult to assess the implications in the 21st Century context - some of the shifts in the power balance include:

• rapidly developing BRIC economies and influence
  
• power shifting from mainly (US) corporation owned oilfields to mainly sovereign state controlled oilfields - many of which are at best ambivalent to US interests
• instant global communications and the power of hedge funds and speculators
• genuine and powerful environmental concerns, pressure groups and lobbying
• general recent global decay/neglect in development of nuclear technologies post 3 mile island etc
  

What effect these disparate factors have on the global economy is unclear but what seems obvious at the moment is that oil prices will continue to trend upwards - whether a bubble is forming remains to be seen.