How Much Worse Can It Get for Oil?

Not to be hawkish on oil prices, but how much worse can it get for oil in the short run? While there are lots of things that can take prices into the stratosphere over time, let’s count the new-ish short-run things currently pushing prices higher:

  1. The U.S. economy is stronger than expected, pushing up demand expectations
  2. Goldman Sachs is out with a major report predicting a possible oil super-spike to $200
  3. The U.S. and Iran are fighting about nuclear energy
  4. Rebel attacks last weekend further curbed supplies from Nigeria
  5. Mexico has newly seen supplies from a major fall faster than expected
  6. Venezuelan production is off on strikes and Hugo Chavez has fired 20,000 oil workers
  7. The U.S. summer driving season is set to begin
  8. There is goofy election-year posturing in the U.S. about a gas windfall tax, and about a tax amnesty for gasoline

Of course, we still have the weak U.S. dollar, speculative fondness oil, worries about Iraq production, etc.

So, I’m not saying oil prices can’t go higher from here, because they clearly can — and there are plenty of reasons to believe they will over time –  but doesn’t it seems as if the probabilities currently favor lower crude prices, at least in the short run?

Where do folks come down on the balance of probabilities?