Oil prices are expected to average between $100 and $120/barrel in 2012. “Economists say they expect prices to remain high despite the relative weaknesses of the American and European economies because global demand for oil … is escalating and outstripping supply.” [New York Times]

Due in part to consumers driving less and purchasing more fuel efficient cars, the United States economy has weathered high oil prices relatively well in 2011.

Bernard Baumohl, chief global economist at the Economic Outlook Group, told the Times that “the danger is if oil starts to move toward $130 a barrel, or even higher… Then you’re really talking about the prospect of the U.S. tipping over into recession in addition to Europe, and that the whole global economy will be facing an economic downturn.”