Oil may reach $250 a barrel according to Alexey Miller, the CEO of the world's biggest energy company, Gazprom. He made his remarks in the aftermath of last Friday's huge rise in oil prices to above $139 a barrel - a massive hike of almost $11 in a single day, in consequence of the fall in value of the US dollar. Recently there have been unpromising predictions that oil could reach that sesqui-milestone of $150 by the beginning of July, up from $100 at the beginning of the year, and if Goldman Sachs are correct, on the way to the $200 barrel within 6 - 24 months. I was hedging my bets at $200 by the end of 2009, but I would not be entirely surprised if it came sooner than then in the wake of recent roaring price increases in oil per se, and the knock-on from that to escalating fuel and food costs.
Using the word "wake" is possibly a Freudian slip, as we are facing the death of the oil-plenty era - or certainly that of cheap oil. I have noticed that there is a rough numerical correlation between the $ price of a barrel of oil and the UK pence price for a litre of diesel, around $130 and 130 p. While there are mutterings that Mr Miller is overstating the gravity of the world oil situation, I would not be too surprised if he is not so far off the mark. I did see something about $300 a barrel by 2015, but predicting just how big the inevitable gap between demand and supply will be by then for oil and its resulting price, are probably good guesses at best.
Almost certainly, along the way there will be abandoned cars, businesses, homes, jobs and hopes. I recall a line from the film "The Day After Tomorrow", when one of the main characters says (something like): "I realise I have been planning for a future that no longer exists." I am left with that same unsweetened taste. Also during the inevitable phase of transition there will be winners too, and those with the major natural resources, particularly those of fuel, will hold the strongest hands to throw on the table in this gambling game we are playing with the future of the world. For example, the United Arab Emirates are budgeting at $40 a barrel while the price is almost $140. Thus they make $100 a barrel over and above their economic plan - i.e. a surplus of almost $100 billion a year.
Such surpluses and what is done with them will become key drivers in world affairs and power will fall into those hands that control the carbon compounds that literally drive the modern world. A world without which, or without a clearly and practically implemented alternative strategy to cheap oil, is doomed. Meanwhile food prices are also soaring for a range of reasons, but rising fuel costs are not helping to bring them down.
I read this morning that in consequence of food-aid and probably turning over potential food crops like wheat from food to biofuel production, the "US has nothing else left in [its] food pantry." The sale of 18.37 million bushels of wheat has just been announced from the USDA's Commodity Credit Corporation (CCC). There is apparently no cheese, butter or milk powder either leaving only 2.7 million bushels of wheat, or about sufficient to bake half a loaf of bread for each member of the 300 million population of America. The American Agriculture Movement (AAM) has raised its concerns about the impact of food politics on domestic food security.
The CCC is owned by the Federal government and is intended to stabilise, support and protect farmers' incomes and prices and also to keep in balance and sufficiency agricultural commodities and subsidies in an "orderly" distribution. As has been emphasised, having a Strategic Energy Grain Reserve has the same import as the US Strategic Petroleum Reserve: i.e. it acts as a buffer against impelling forces of various kinds, to keep the nation fed as well as fuelled. The American Agriculture Movement has pledged to continue the work of the Farmer Owner Reserve (FOR) which allows grain to be stored on farms, as a central component whereby grain supplies could be decentralised in the event of "some unforeseen calamity which might befall the large grain storage terminals. Presumably like a bomb going off at one!
I'm not sure what reserves of food we have in the UK but I recall seeing a figure of 11 days worth of fuel should some "unforeseen calamity" interrupt our imported supplies of it.
 "An ominous warning that the rapid rise in oil prices has only just begun." By Danny Fortson.
 Tristate Observer. http://www.tristateobserver.com/modules.php?op=modload&name=News&file=article&sid=10121