$86

U.S. light crude oil for November delivery closed at $86.13. Wow. What has been somewhat amazing is that the price we pay at the pumps hasn't jumped as well. The official line is that with the summer driving season over, demand has diminished and stockpiles have risen. However, it's very hard to believe that this state of imbalance will remain for much longer. One way or another stockpiles of gasoline will be diminished and we'll be paying way over $3/gallon again.

The high watermark for oil (in inflation adjusted dollars) is $90 a barrel struck after the Iranian revolution in 1979. It would now appear very likely that we could see a new peak.

Just this week an Automotive News article asked "Why haven't small-car sales taken off?" The article defined "small cars" as those with a wheelbase of less than 103 inches and overall length of 175 inches or less. Using that basis small car sales in the first nine months of this year were up only 3.4 percent.

If $3/gallon isn't the tipping point for US consumers, then what is? $4? $5?