There are three factors driving crude prices higher.
1. NATO led War against Libya means a major supplier is unable to supply any oil.
2. Nuclear crisis in Japan makes people nervous about future of nuclear energy- especially in earthquake prone regions.
But that’s not all.
3. Production of oil in the US are low. The stockpile (reserve) is at their 25 year low. Keeping in mind US is the biggest oil importer by far, it is natural that oil prices will go up.
Oil is keeping around 120. Hopefully it’ll stay there for some time (a month or so) before starting to climb again. That’s because if it sees a spike, it’ll fall back to 120 if the baseline is established there, and not to 90.
We in the “third world” buy locally grown food, travel in public transport, save on electricity- and that makes our economies much more fuel efficient and robust against rise in oil prices. Only high prices of oil will force the “developed” countries to change their habits and become civilized. Otherwise they’ll blame us when their CO2 causes Bangladesh to sink under the sea.
Secondly, a high price of oil will cause the West’s hegemony to lose grip, iA.
I feel the pinch too, but we should be able to rise above saving a hundred (rupees) or two if that causes the poor to sink under the sea.