A rule of thumb says that a doubling of oil prices over one year leads to a recession. Demand then sinks and prices come down again.
Oil futures for Brent crude were slightly above $124/barrel today. The weekly futures chart shows the current increase.
The price increase over the last six month seems slightly parabolic.
The monthly futures chart allows comparison with the last parabolic increase in 2007/2008.
It reached $150/bl during the summer of 2008, double the $75 of a year earlier. Then a lack of further demand led to a crash of the speculative futures price.
Using the rule of thumb $150-$160 this summer would be double the price of last summers oil and probably cause another recession. Given the parabolic trend in the chart such prices could indeed be reached during this summer.
Global demand during this summer will be higher than usual as Japan will have to burn a lot more oil to replace lacking electricity output from its nuclear plants. The civil war in and foreign war on Libya took only 3% of the world production off the market. But Libyen oil is about the best "light sweet" stuff one can get. One would expect that in this case the Saudis would act as a swing producer and increase their output. But they seem to do the opposite now and it is quite possible that even while drilling frantically they can no longer produce enough high quality spice to replace the lost Libyan output and to stabilize prices.
The U.S. ecomomy with 10+% unemployment has by far not regained its full potential. Another recession would have serious impact on it with strong poltical consequences. With the current congress another Keynsian rescue from a recession, priming the pump with government programs, seems impossible.