You will recollect that when oil was around $120, and some were forecasting oil going up to $250, I forecast oil at $40.

Then, when I was proved right, others started forecasting oil at down to $25. I stuck to my guns and said that while oil prices were volatile, the natural point of gravity for oil then was 40, not 25. Though oil did dip occasionally to around 33 (so that I was even at the bottom price more right than the doomsayers), it has continued to be around 40.

Today, I tell you that we will soon see the oil price go back up to $100.

However, just as oil at $140+ had nothing to do with fundamentals but only with speculation, and just as oil even at $33 had nothing to do with reality but only to do with speculation, so speculation is what will drive the price up to $100. The "natural market price" for oil (including "normal speculation"), in my view, remains around $70.

So why will the oil price soon shoot to $100? Why will speculators push the price to this level? Because of the attacks on Israel, and the crisis around oil production and supply that will soon emerge, created by Iran but aided and abetted by other countries which "need" the price of oil to be as high as possible - or at least around the natural market price.

Why then will it go to 100? Because the current structure of the global economy commits it to pendulum swings. And the swing has gone too far (down) for too long (from the viewpoint of certain countries).

So the next upswing (coming soon) is what will take the price to $100.

Why not higher? Because even speculators need something to speculate with and speculate on. There isn't the same supply of money to speculate with, there isn't the appetite to speculate that much right now, and the "excuse" of a booming economy and "booming demand" (on which the price of 140+ was predicated) is not to be seen anywhere.

WHEN will the oil price START swinging up? Pretty soon. As soon as the conflict in the middle east hots up a little more.

However, because this oil price rise has nothing to do with an increase in productive demand or a productive economy, but only to do with war and fears of war, it will worsen the situation for all oil-importing countries.

That is also why other commodities will benefit marginally because of a sympathetic rise in slow sync with the oil price, but the commodity price rise will soon steady or deflate.

The global problem of a deflating economy will continue. Chinese stocks, for example lost 65% of their value in 2008. Though they may recover by as much as 50% from today's levels at some point in 2009, altogether they will lose at least another 65% from today's levels during the course of the next 12 months - possibly, they will crash much more, depending on how China manages the social unrest that will grip it this year.

And President Ma of Taiwan will be shown to have been an idiot for having driven the country's economy, society and even military to such deep entanglement with China.

As Taiwan then tries to withdraw, while China wants to get even closer hold of all of Taiwan's money and productive talent and capacity, the US and other countries will be called upon to get involved - with consequences that are at present unclear to me, because I don't see right now the relative strength of the US military presence in the area at that time, let alone the shape of the US economy, nor the will of Obama and others around him.

Some of that will become clearer towards the end of January as Obama's soaring rhetoric is tested by the reality of developments to do with the Middle East and Russia.

Professor Prabhu Guptara