[MRM]

My WAG is about $5 to $5.50 by the end of summer. My thinking is that the US demand for oil and gas is pretty price insensitive, but that the Arabs know that in the long run we can start significant conservation and alternative energy efforts that will reduce demand quickly once they start to take effect. So in the short term they have us over a barrel, but it won't stay there for more than a year because we'll adapt and conserve.

That is actually good for the economy. Using less energy because it costs more saves money in the long run, and gives the economy the same boost as a tax cut. Much of the 1980s and 1990s expansions was attributable to the fact that energy had been more expensive, people and companies started conserving, and then prices went down. Of course we squandered the savings as energy costs went down, but in the mean time we enjoyed a great stimulous. The same thing might happen again.