An expanding global economy fed by the insatiable hydrocarbon consumption of industrialised countries as well as Asia's fast growing economies is witnessing a sustained and rising demand for oil.
With production capacities of petroleum exporters increasingly being questioned many are openly predicting a three figure barrel price. The margin of spare production capacity is already so narrow that the market jitters at the slightest interruption to any key source of supply.
Analysts say that a combination of two or three adverse developments on markets such as natural disasters, war, political crisis could easily send oil not just to $100 a barrel but substantially higher making last year's prediction by Goldman Sachs of $105 a barrel look mild in comparison..
The current oil price of about $67 a barrel is slightly down on the record $70.85 set at the end of August, 2005 but prices have remained 50 per cent higher than one year ago.
Industry insiders, including Algeria's Energy and Mining Minister Chakib Khelil, consider that with China's continuing growth there is now such a consistent upward pattern in oil prices established that prices reaching towards $100 a barrel are almost certain in 2006.
Ali Bakhtiari, head of strategic planning at Iran's National Oil Company, Dr Colin Campbell, former executive vice president of Total-Fina and Mathew Simmons, an energy investment banker, have stated their belief that global oil production is about to peak.
Chevron CEO David O'Reilly says that half the world's exploitable oil has already been used: "If it took us 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30 years."
Boone Pickens, head of Mesa Petroleum, has predicted that the $100 a barrel price will be reached by the end of 2006. He asserts that a fundamental imbalance between available supply and growing demand has been reached.
Nothing is certain though. Demand for oil is constrained by the world's limited refining capacity. Present refineries are ageing and already working at full capacity. To design and commission new facilities could take up to a decade. In the meantime a dampening in business confidence and investment could halt the growth in demand for oil.
There are no such signs. Suggestions made last year last year that oil prices would decline 10 per cent in 2006 as a result of the Chinese economic boom beginning to slow down have not materialised.
OPEC states pump some 30 million barrels-a-day at virtually full capacity. According to Venezuela's President Hugo Chavez the organisation has already reached is production ceiling.
If oil prices remain at $50 and above then untapped oil hitherto uneconomic to extract, such as heavy oil in Venezuela's Orinoco basin and Canada's oil sands' deposits become highly significant possibly extending the oil age by another century.
However, if the world begins turning towards areas other than the Middle East to supply its oil needs it will say farewell to cheap oil. In a few years time $100 a barrel may seem nostalgic!