No one is going to come to the rescue on the supply side — and, of course, we remain stuck with an administration that doesn’t believe in demand-reduction strategies.
As the Wall Street Journal (subs. req’d) reported in "OPEC’s Lever Loses Its Pull on Oil":
Oil prices are hovering near historic highs, but consuming nations shouldn’t expect quick relief from OPEC, the world’s only source for big, quick supplies.
For several reasons, the Organization of Petroleum Exporting Countries has neither the clear leverage nor the inclination to open the spigots and drive down the price of crude, which jumped past $90 a barrel in intraday trading in New York last week for the first time.
This figure shows how little spare capacity OPEC has — essentially none outside of Saudi Arabia, and the Saudis have no inclination to initiate a major price drop, especially since these prices do not appear to be destroying demand.
Moreover, the International Energy Agency (IEA) warned back in July that it saw "OPEC spare capacity declining to minimal levels by 2012."
And the WSJ notes no one outside of OPEC will be coming to the rescue either:
Saudi Arabia has little to fear from the world’s other major producers, such as Russia, which in decades past have ramped up supplies in an effort to capture a greater market share. But at the moment, the world’s major producers for the most part are already pumping flat-out.
"They have little competition from non-OPEC suppliers and few worries about losing market share," says Jeffrey Currie, senior energy economist at Goldman Sachs in London.
We cannot be far from $100+ oil.