“What is disturbing here is that things seem to get worse, not better,” an analyst at Goldman Sachs, David Greely, said. “These high prices are not attracting meaningful new supplies.”
That’s because there isn’t any extra supply waiting for higher prices in order to become profitable. Demand is way ahead of supply, and this is made much worse by massive speculation and manipulation in the futures markets. It’s a classic bubble.
And like any bubble, it will eventually pop. However, were $200 a barrel oil to become a reality, world markets would be in disarray and it’s a given there would be serious social unrest, if not actual riots.