Crude prices at record highs!

Crude prices at record highs!
What a difference a couple of years can make. In ‘Rip Wan Winkle’, the change that occurred in decades takes now just a few years. It is hard to believe that crude oil was selling at $10/ barrel in 2000- just 8 years back. The same is now $132 / barrel and rising fast( And to add salt to injury, the slowing global economies have to remember that the cost of production of one barrel of crude oil in Arab countries is $1 ). It seems like Armageddon. But this has happened before also. In the previous big oil shock of 1970’s after the Arab – Israel conflict, the Arab countries turned the crude oil tap off, angry as the they where over the role of western countries and US in particular for their support to Israel (Could history be repeating itself- first time as tragedy and second time as farce- and the Arab countries have again turned off the crude oil tap , angry as they must be over the on going war in Iraq & Afganistan ?). The previous high of crude oil was $ 33/ barrel in 1990’s. Then it fell to a low of $10/ barrel in 2000. A fall of more than 70% from its peak!
Where every body is talking of crude oil at $200/ barrel in a few months, I am willing to stick my neck out and predict that in about a few months to a year, crude should be around $40-$50/barrel.
Why? Firstly, the world economy is already slowing, with the world’s biggest economy
( it might not remain so for long in future & eventually has to be over taken by China )- USA is on verge of recession. Secondly, the central banks of some of the growth engines of global economy China & India are raising their bank rates thus slowing the economic growth & dampening crude oil demand. Thirdly, the record high prices are bound to bring massive additional supply to market. And the commodities prices seem to be in a bubble stage. Fourthly, high prices are bound to reduce consumer consumption and give a boost to alternative technologies to oil guzzling automobiles like hybrid cars are already a commercial reality. Last but not the least, policy makers all around the globe are in a panic, & when they start to panic markets stop to panic. Hmmm, let us see what happens. As someone rightly said, may you live in interesting times. And we certainly are doing so.