After the price of crude oil briefly touched a record US$100 a barrel last week, many observers seem to have accepted that the upward march of energy costs is unstoppable and that three figure prices for oil are certain as we enter 2008.
Yet continuously climbing oil prices are far from inevitable. There are good reasons to believe that instead of rising, crude prices could actually fall this year.
After nearly 10 years in which the cost of a barrel of crude has risen almost ten-fold (see chart), the arguments for an ever-higher oil price will be familiar to most readers.
Demand, especially from energy-hungry China, has soared in recent years, pushing up prices. Meanwhile oil is getting harder to find and more expensive to extract, increasing supply costs.
To make matters worse, a large proportion of the world's crude is sourced from geopolitical trouble spots such as Iraq and Nigeria, where supplies are subject to frequent interruptions, further bumping up prices.
At the same time, the world's refining industry is suffering from severe bottlenecks caused by years of under-investment in the 1980s and 1990s, which constrain the supply of petroleum products, adding to price pressures.
And finally, the value of the US currency is sliding, which pushes up the price of oil in US dollars even if it is static in terms of other currencies.