No one knows for sure, of course. But some early guesses by top economists start in the neighborhood of the 2008 oil spike, which peaked out at $147 a barrel.
Though that is still 40% above the current price of U.S. crude, it is not exactly reassuring news. Strong global demand, together with questions about dwindling spare oil production capacity, are making a repeat visit to spikeland look more likely.
Oil hitting $140 a barrel could mean that "some of the advanced economies will start to double dip," NYU economist Nouriel Roubini said Wednesday in Dubai. He said the U.S. economy is expanding fast enough that it will probably avoid a relapse, but added that a price spike could leave it at "stall speed."
Dr. Doom isn't the only one thinking this way. Bank of America chief economist Ethan Harris is concerned enough about rising oil prices that he trimmed his global economic growth forecast by a tenth of a percentage point Wednesday.
The modest cut is noteworthy because Harris has been bullish about economic growth in recent months, while playing down any U.S. inflation risks, thanks to stronger than expected economic numbers.
"As the data flow has improved, we had been leaning toward bumping up our global growth call," Harris wrote in a note to clients Wednesday. "Unfortunately, the oil price surge more than cancels out that upgrade."
BofA economists said Monday they believe oil prices in Europe, recently around $115 a barrel thanks to Mideast unrest and the Continent's dependence on easily refined sweet oil grades, could "temporarily" hit $140 in the next three months.
Though they expect the Brent price to fall off after a second-quarter surge, that spike could deal a damaging blow to a recovery in Europe that makes the one here look downright sizzling.
BofA raised its full-year average oil price to $108 in Europe from $88, and to $101 in the United States from $87.
Even at that, Harris isn't quite waving red flags about recession. But if oil prices take off and stay elevated, it could mean curtains for growth.
If the production shutdown spreads outside of Libya, we will be revisiting our forecast again and if oil prices go above their historic peak of about $150/bbl on a sustained basis, a global recession becomes a real risk; at $200/bbl a recession seems almost certain.
As if you need another one, this is surely a sign of the times: look who's doomsaying now.
