Oil hits $118 a barrel

Today oil exceeded $118 a barrel. In fact, it neared $120.

The big question is not if long-term prices will go up, but will short-term prices continue to go up.

I believe that there is a perfect storm of economic conditions to support short-term prices hikes to $150 per barrel.

If interest rates are lowered by central banks around the world to soften the blow of the sub-prime mortgage implosion, that would tend to counter the inflationary effects of higher oil prices.