www.enreport.com

Turkish petroleum prices at the pump are as follows:

• gasoline prices are 4.5 TL/liter (2.54 $/liter), (1.9 €/liter) (9.6 $/gallon)
• diesel prices are 3.9 TL/Liter
• 1 $ = 1.77 TL and 1 € = 2.37 (by the end of Feb 2011)

Practically 2.5$/liter is equivalent to 392 $ /barrel. So what are the implications of this high prices. According to Turkish Petroleum Organization (Petder.org.tr) report for 2011, there are several results.
First of all about prices; The price consists of 1/3 refinery price and 2/3 tax. Therefore a 35% increase in world oil prices is reflected as 13.9% increase at the pump...Below is the table for prices in TL.

The other result is a decreasing consumption of Gasoline and consumer demand towards cheaper and more efficient fuels.
In 2011, Turkish gasoline consumption dropped 5.4 % , this has three reasons
1. People are buying preferring smaller engine size (<1600 cc), due to taxes and expensive oil prices
2. People are chosing diesel cars over gasoline cars since diesel is cheaper, more energy dense (more km/liter) and efficient engine technology.
3. Gasoline cars in Turkey can be retrofitted with LPG units with a cost 600-700$... There are estimated to be a 2.5 million gasoline powered cars with LPG units(2011). Since LPG tax is lower

Therefore, if you buy a car, you hardly give up the car for fuel price reasons. But you try to minimize operating costs (diesel, LPG fuels) despite upfront costs (diesel cars cost more, LPG unit). That is to say, even a 400$/barrel world will not stop the car sales figures but shift the consumer choice for more expensive(in sales prices) but relatively less costly(fuels) to operate cars.

References
Daily official oil prices from EPDK , https://ppbp.epdk.org.tr/Rapor/Akaryakit/Paylasim/RaporSekizFirma.aspx
Daily Exchange Rates from Turkish Central Bank http://www.tcmb.gov.tr/

As the trust towards paper money decreased, I am wondering whether the oil is priced with gold... After checking several statistics, there is a Beta distribution of Gold price/WTI price ratio.
So far 15-17 is a ratio between gold and wti. Therefore in the following month (August,2011), numbers point to oil prices of 110$ (WTI), and 130$ Brent.

Note on 5 August 2011: I expected the panic to start by end of August. However seems like it has been already started.. So the recent panic has broken the relation. Gold is on the rise, oil is down..... This is a typical ringing bell of a recession... Next time I should state "ceteris paribus":)
One thing to watch is the base price level of oil...
www.barissanli.com

There are several explanations but let me summarize that
1. The realization of profits from commodity rush
2. Euro's fall, dollar's rise (read econbrowser link at the end)
3. Inventory levels
4. Demand Destruction
But to have a broader understanding, here is a bunch of explanations from FT (stated from some other source):

-”disappointing global economic headlines” (Platts), referring specifically to an unexpected fall in German industrial orders and the strongest rise in US unemployment since August 2010

-OPEC’s consideration to raise formal quota levels in June

-the death of Osama bin Laden and falling geopolitical risks amid “stabilising tensions” in the Middle East and the end of Nigerian elections

-the end of QE2 in June

-interest rate hikes in India and other Asian countries

-the rise of the dollar amid ECB indications of no imminent further interest rate hike

-the impact of higher fuel and commodity costs

-the general sell-off in commodities, with silver losing 25% of its value since April 25

-George Soros cutting his gold holdings

-a larger-than-expected build in US crude inventories

-a fall by 1.3 million b/d to 18.3 million b/d in US weekly implied demand figures

Ref:
http://blogs.ft.com/energy-source/2011/05/06/explanations-for-the-oil-crash/
http://www.econbrowser.com/archives/2011/05/lower_oil_price.html

From 321energy.com web site, Frank Holmes has this nice graph, which should be in the collection. The graph shows the seasonal changes in oil prices with 28, 15 and 5 year patterns. It is interesting to see these variations in terms of different time spans.

A graph from the IEA's report WEO 2010 reveals that IEA believes that the world crude oil production (not including NGL or others) has peaked in 2006 or nearby:

Previously, I asked Mr. Fatih Birol, chief economist of IEA in a conference(in 2008) at METU Alumni Association, whether world will see 100 million b/d (current production of crude+ngl+other is hovering around 85-89 mb/d). He briefly described the nuances between crude oil, crude oil+NGL or other associates of crude oil. Then he stated "I don't think so"(for crude oil only). World Energy Outlook 2010 steps further and addresses a peak in crude oil only production as I marked on the graph.
Wikileaks reveal some interesting documents regarding Saudi Production. Sadad Al Husseini retired head of exploration and production for Saudi Aramco, states that Saudi Production can hardly hit 12.5 million b/d and according to documents :

" as he believes that Aramco’s reserves are overstated by as much as 300 billion bbls of “speculative resources.”
the former Aramco board member does believe that a global output plateau will be
reached in the next 5 to 10 years and will last some 15 years, until world oil
production begins to decline." (Wikileaks)

The cable is from December 10, 2007. But there is nothing to confidential about it. Sadad Al Husseini said these things before. He previously to energy bulletin he writes :

"Therefore my answer is: under the current circumstances and outlook, oil is likely to peak at a 95 mmbd plateau by 2015 and can then be sustained well beyond 2020 at increasing real oil prices."(Energy Bulletin)

So are we peaked or are we on the plateou of world oil production? We should better be careful claiming answers to such questions. But it is easier to say that, oil production will suffer from delayed investment. To get a better understanding of oil prices, we should check the storage levels and price trends during the May -driving season-. My personal belief is we are entering another high price cycle unless another economic slowdown happens. It is a risk to write those things openly on the net, since net has a memory. Prices may calm down? I am desperate to see that...

http://www.energybulletin.net/node/9498
http://www.theoildrum.com/node/7102
http://www.wikileaks.ch/cable/2007/12/07RIYADH2441.html

Matthew Simmons' article is the most visited in FP's web site for a couple of days. Before reading his article, as he suggests, check the links in this paragraph:
"The four pieces were Pulitzer Prize-winning author Daniel Yergin's seven-page article in Foreign Policy, energy analyst Michael Lynch's three column op-ed in the New York Times, analyst Edward Morse's essay in Foreign Affairs, and scholar Amy Jaffe's paper published by the Baker Institute at Rice University." http://www.foreignpolicy.com/articles/2009/09/04/oil_spin?page=0,0

Sadad Al-Husseini a veteran Saudi Aramco exexcutive has came up with a series of suggestions. These may not be new, but can be alarming bell for the next oil price rally in 2010. Some interesting notes:

The oil price surge that started in 2003 and collapsed in 2008 had its
roots in 1998. ....
What action is required?

• A regularly updated listing of all future oil and natural-gas-liquids (NGL)
  projects.
• Future capacity costs.
• Proven reserves categorization.

Creating an institution to house such a process is
the best way to begin to deal with the oil-supply challenges that must surely
lie ahead.

Ref: JPT Online, http://www.spe.org/jpt/print/2009/08/7GuestEditorial.pdf

There is a very good presentation by Matt Simmons arguing the bad side of cheap oil. The low prices keeps the investments at low levels. Therefore the seeds of another oil shock will be planted soon, if prices do not climb to acceptable levels.

The presentation is available here : http://www.simmonsco-intl.com/files/SPE%20Gulf%20Coast.pdf

Nowadays when making oil price forecasts, one should also consider how the dollar's value will change. Before the G20 in London, interesting discussions are going on.
If there are concerns about dollar's long term future (we do not expect any radical changes in the short term), oil's value in terms of other commodities may stay same but in terms of dollars oil prices may rise.

WSJ : China Takes Aim at Dollar
Chinese Central Bank : Reform the International Monetary System