THE price of a barrel oil went past $68 during the day on Monday June 1st, the highest level in seven months. Although this remains less than half the peak of last July, prices are likely to remain above the norm of the past few decades, lifted with every bit of cheery economic news and as the dollar weakens. Some economists are now again talking of the approach of "three-digit oil prices", in part as large emerging economies, such as China, India and Brazil, which are energy-intensive, appear to emerge from the worst of the downturn. In the longer term, prices could be pushed upwards thanks to demand from the emerging world and because of difficulties increasing global supply.
Consumers have not forgotten the pain of high oil prices in 2008, when a barrel of the black stuff peaked at $147. In rich countries commuters squealed especially, not only because of the expense—rich-world consumers found that they were forced to spend a larger, if still low, share of their income on transport—but also because of the volatility of the price and the sheer speed of the increases. As higher oil prices nudged up transport costs and energy bills, inflation began to rise. Carmakers were affected too, as demand for new vehicles slumped. The suddenness of the price rise left little room for consumers, companies or governments to adapt smooth...
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