$130 oil? Try $30/bbl...

For those who think this time it's different (actually it is, isn't it? Errmmm...) check out this item from Credit Suisse global strategist Jonathan Wilmot, entitled "How Much Demand Destruction" in which he says that oil prices are and remain very sensitive to global economic growth and given inflationary concerns (and central bank cred, what's left of it) we're pretty close to a tipping point... and oil prices could well get to the $30 range.

Here are his front page bullet points (my emphasis):

How Much Demand Destruction?

• Most of the emerging world has a genuine inflation problem while most of the developed world has a rapidly escalating income, profits and credit problem that points to recession or worse.
• But two decades of hard won credibility for G10 central banks is at stake, so they cannot completely ignore the simultaneous shock to inflation expectations.
• Current and near-term global oil supplies are severely constrained: stabilising or reducing oil prices thus seem to require accelerated demand destruction in the OECD.
• By implication, the world’s major central banks may have little choice but to quietly allow the developing recession to unfold, while using other policies to limit damage to the financial system.
• That is essentially what market price action over the last month or so has been telling us, and might even be seen as the real sub-text of Bernanke’s testimony.
• This makes it all the more important to understand what combination of slower global growth and high energy prices will bring global oil demand to a halt. Our analysis suggests we are close to a tipping point towards much lower oil demand, and price.

If you can access CS research, please do so (or you can always ask me.) Otherwise, it's all Wordled here: