[ QUOTE ]
{quote] Why do you think it's going higher?
[/ QUOTE ]
Because (1) the oil producers have the world by the balls and (2) the demand is rapidly increasing as China and India become more developed by the day. And long term, because the supply is limited.
[/ QUOTE ]
All these things have been true for some time. And oil prices have been roughly flat for 25 years,
adjusted for inflation
If you adjust the numbers for inflation it looks like betting on higher oil prices during a spike is a fools errand. In 1980, oil prices were close to $100 a barrel in 2005 dollars. Six years later they were $20 a barrel. In 1990 they spiked to $50 a barrel, but back below $30 in a year.
World oil prices aren't that much higher today than they were
five years ago. What has happened is the U.S. dollar is depreciating in value, so while Oil prices are only mildly higher in Euros, they have skyrocketed in dollars. In fact, you can argue that most of the U.S. price spikes over the last 30 years have been due to the dollar declining in value.
That said, if you want to bet on a lower dollar by betting on higher oil prices, you'll probably be right as long as we are running big deficits. But there are certainly better ways to bet against the dollar than that.