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The cumulative effects of higher oil prices, higher food prices and the credit crunch are only just beginning to be felt. Now it seems certain oil will go to $150 a barrel before the end of the summer, and that will be the real crunch.

Higher oil will mean even higher food prices, and of course higher energy prices at home and at work. Solar panel prices are set to collapse, but not yet. We are set for a year of living dangerously.

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The oil price has already doubled in the past 16 months, but the effects have been, to many, surprisingly limited, especially when compared with the circumstances surrounding the oil shock of the late 1970s.

Goldman Sachs yesterday warned investors to expect US$150 to US$200 a barrel over the next two years. Some believe oil would need to remain at that level for at least two quarters before it would exert a drag on growth similar to that experienced in 1981. The difference between then and now is low, low interest rates.

Oil set a record high above $120 a barrel, resuming its advance after a sharp downward move last week.

Supply disruptions in Nigeria, where a strike and attacks by militants have hurt production, continue to support a market that is nervous about any threats.

Tensions between the West and Iran appeared to increase when Iran refused to accept inspections of its nuclear program, which the West fears could be used for weapon production.

”The downward move in oil last week now seems like only a correction,” said Christopher Bellew, senior vice president at Bache Commodities. ”The effect of the credit crisis in the United States is reducing people’s disposable incomes, and you’d expect this to have an impact on the oil price, but it’s not having any impact.”

He said that demand from emerging markets like India and China was more than compensating for the U.S. downturn.

Oil is up by 25 percent since the start of the year partly because of the problems in Nigeria and weakness in the U.S. dollar, which has driven up the price of commodities denominated in the U.S. currency.

Oil retreated almost $10 a barrel last week, partly because of a reduction in speculative positions and as strikes affecting Nigeria and the North Sea ended. ExxonMobil said Tuesday that it had returned oil output in Nigeria to normal levels after an eight-day strike, but Shell said its production there was still down by about 164,000 barrels a day after recent militant attacks.

”A lot of this is supply-driven, with the market very vulnerable to any disruption in supplies,” said Mark Pervan, a senior commodities analyst at Australia & New Zealand Bank. ”We’re seeing large oil-producing countries coming up as a question mark.”

Traders are looking to the release Wednesday of the weekly U.S. government report on fuel inventories, which is expected to show a 1.8 million-barrel rise in crude stocks, a 1.1 million-barrel rise in distillate inventories and a 100,000-barrel drop in gasoline stocks.

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