A hundred bucks a barrel by the end of the day?

[Updated Below]

Anyone feel like wagering?

CNN just reported that for the first time ever, the price of light, sweet crude oil has topped $99 a barrel, and hundred-dollar oil is "the next target to hit," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

The surge in the price of oil, in a short trading week, underscores the bull-run on oil, and winter, with higher consumption of heating oil isn't even here yet.

This might be an opportune time for a trip down memory lane...

In January 2001, when Bush took office, OPEC convened a meeting in Houston where the biggest concern of the member nations was a price collapse and they took steps to institute a price band that would maintain the price between $22 and $28 per barrel.

If OPEC were to narrow the price band, political expediency on the home front would probably result in a price band centered around $25 per barrel. Unfortunately for OPEC nations this price band would likely come under threat within a year. The last report had non OPEC production up by 700,000 barrels per day and non OPEC production will continue to increase as long as prices remain much above $20 per barrel. If these increases are accompanied by weaker world economies OPEC will have to reduce its market share to maintain prices. At some point OPEC will have to make the decision that it usually faces twice a decade. It must choose price or market share, but it cannot have both. A price than can be maintained with market chare is closer to $20 per barrel than to $25.

What's left to say? "Heckuva job, Bushie"?

I need a valium and a drink...and it isn't even noon...

Update:

Oil topped at $9929, but the Dow Jones fell 211.10 points, or 1.6%, and the decline was matched by the Standard & Poors. The dollar fell to $1.48 against the Euro.

From the New York Times:

“This is an ugly week,” said James Paulsen, chief investment strategist at Wells Capital Management. Indeed: the Dow lost 2.9 percent of its value in the last three days alone.

Some market watchers suggested that lower trading levels during a holiday week make the market more volatile, but at least one analyst disputed that notion. “I don’t know of anyone taking a day off today,” said Dennis Davitt, who oversees equity derivative trading for Credit Suisse. “Not in these conditions.”

Crude oil futures briefly rose above $99 in overnight trading and an Energy Department report showed that inventories fell slightly last week, leaving investors wondering how soon oil will be nudged above its inflation-adjusted record of $102. Crude settled in New York trading at $97.29, down 74 cents.

The recent run-up in oil prices, which threaten to curb consumer spending, dovetails with a shaky economic outlook released by the Federal Reserve yesterday, which predicted a slowdown in growth over the coming months.

So...Happy Holidays, y'all...