How high will oil prices go?

The price of oil hit $119.79-a-barrel last Thursday, the highest point since August 2008, amid fears of a burgeoning oil crisis. Continuing unrest in the Middle East has sent prices rocketing in recent weeks, and Saudi Arabian officials, hoping to curb the trend, boosted output to make up for the lost production in crisis-torn Libya. Is the worst over, or could the cost of oil rise even further — and possibly torpedo America's slowly recovering economy, just as it did during the 1970s?

Prices won't go down, but they may not go up either: Prices will remain high as long as Libya remains in flux, says Clifford Krauss at The New York Times. But we're not looking at the snaking gas station lines of the 1970s just yet. "Most of the countries suffering problems are not major oil producers" — Libya, for example, produces only two percent of the world's supply — and Saudi Arabia looks stable for the time being. Right now "a full-fledged oil shock" is far from certain.

"A tipping point for oil prices"

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Revolution in Saudi Arabia could push prices to $200: If the Arab revolts spreads to Saudi Arabia, which holds 20 percent of the world's oil, the results could be devastating, says analyst Gluskin Sheff at Benzinga. "Do the math." The situation in Libya has sparked a $10-a-barrel price hike. If the House of Saud falls, "we'd be talking about $200 oil." That would be catastrophic for the global economy.

"Oak Street Wealth Management's market commentary"

This won't be resolved anytime soon: Anyone who thinks the oil industry will return to normal after these "seismic shocks in oil-producing countries" should look to history, says The Economist. Before the Iranian revolution of 1979, the country pumped six million barrels a day. "It has never come close to matching that level of output since." Such potential supply issues don't bode well for oil prices.

"Oil pressure rising"