Reuters writes that International Energy Agency is predicting that demand for oil will keep increasing until 2012 while production falls. According to the report’s authors: "Either we need to have more supplies coming on stream or we need to have lower demand growth." 

With oil prices back in the $75 range, it is hard to imagine that, if the report is right, oil is not moving toward a place well above $80. And that the higher price of oil will not remain high for some time to come.

The impact on large economies that rely on oil imports, especially US and China, could substantially slow growth and industries from airlines to auto manufacturing could be dealt a severe set-back.

The storm flags are up again.

Douglas A. McIntyre