"I understand well your concerns over the prices of foodstuffs going forward since their supply is inelastic. But when I listen to your warnings about the possibility of much higher oil prices logic suggests that supply is more elastic. OPEC producers can produce more (and announce the fact). If there is a big spike in the oil price, is it not likely that the US and others will put pressure on Saudi Arabia, Kuwait, etc to increase supply? Further such countries themselves have a vested interest in protecting the world economy from recession, partly because they would lose oil revenue and partly because their sovereign wealth funds are invested worldwide.

"My thanks as always."

David Fuller's view Brent crude has been leading NYME crude higher in ranging uptrends which have steepened somewhat in recent months. I have often pointed out that if prices were to spike higher for any reason, that would be very bad for global GDP growth, particularly among the western economies which remain weaker.

I respectfully disagree with your points on supply elasticity. Currently, supply is very tight for most agricultural commodities, due to last year's adverse weather conditions. However, a year of more normal and therefore mainly benign growing conditions would make a huge difference.

In contrast, OPEC and non OPEC oil producers could squeeze out a little more oil, should they wish to, but not all of them would. They will understandably feel that their priority is to get as much money for their commodity as the market will bear, and not all of these producers are allies of the West.

Oil exporters have caused price spikes in the past, particularly in the 1970s, not least because of a weak USD. The greenback is not very strong today. Few, if any, oil exporters would prefer to sell their crude to the West at a discount if they could get a higher price elsewhere.