I know I'd get knocked for this, but I'm still bearish on oil in the long run. Yes, even in the face of recent inflation. If inflation is the reason for the recent drive in oil prices, then the oil market is pricing in a 10-15% inflation factor. Ridiculous.

The price of oil has quintupled in the last six years. The only other market in recent memory where price runs like this have persisted for such a long period of time was (drumroll please) real estate. And look what happened to that 'miracle investment'. All I'm saying is I think that too many speculators are in the market, and they're making positions on oil that are driving up the price. Once people start saying "Just buy it, it'll never lose value!", that should be your ticket to dump it.

Even in the US, we're curbing fuel consumption and beginning to turn towards more efficient technologies. Demand has already shrunk in many European nations, it's planing here, and inventories are at seasonal norms. As the price rises, demand will wane; and eventually we won't need to be buying it on the open market, because we'll be supporting demand by ourselves. Consider that:

"If we raise fuel-efficiency standards by just one mile per gallon, we save two ANWRs full of oil over the projected 50-year life of the fields. If we raise them 2.7 mpg, that's more than all the oil we import from Iraq and Kuwait combined. If we raise standards by 8 mpg, we don't have to import one drop of Persian Gulf oil into this country. Fuel efficiency is an untapped resource. It's cheap oil."

I know, it hurts to quote a dirty hippy; but there's an exception to every rule.