Oil will surpass $100 a barrel ?

Oil prices — which zipped past $96 per barrel Thursday — would need to surpass $100 a barrel and remain at that level for at least two weeks or more to inflict widespread and lasting economic damage, says Tyson Slocum, director of the energy program at consumer group Public Citizen in Washington.

Fortunately, the consensus view on Wall Street is chances are slim that oil will surpass $100 a barrel and stick for any length of time.

A severe housing slump and attention-getting credit crunch are tapering U.S. economic growth, which will trim energy demand and bring prices down to around $70 to $80 a barrel, predicts Fimat analyst Antoine Halff.

All bets are off if tensions between the U.S. and Iran escalate, he adds.

But even a snapshot of today's prices compared with prices at the same time a year ago is psychologically alarming.

Crude oil prices hit a record overnight Thursday after the U.S. reported a surprisingly large drop in inventories. Light, sweet crude for December delivery fell $1.04 to settle at $93.49 a barrel on the New York Mercantile Exchange after rising as high as $96.24, a new trading high, overnight. That compares with $58.71 a barrel on the same day last year.

However, looking beyond the day's headlines is revealing and comforting — from an economic perspective. The average per-barrel price of crude on the New York Mercantile Exchange through Oct. 30 was $68.22, compared with $67.34 over the same period in 2006, according to Energy Department data.

The increase is slightly more pronounced at the pump. Regular gasoline has averaged $2.75 per gallon (73 cents a liter) through the first ten months of the year, compared with an average of $2.67 a gallon (70 cents a liter) over the same period last year.

Consumers are changing their behavior in response to higher prices at the pump. Sales of hybrid vehicles and energy-efficient compact cars are expected to set records this year, while sales of gas-guzzling pickup trucks and SUVs have declined.

Jason Shogren, a professor of economics at the University of Wyoming, said the U.S. economy has held steady when oil prices increased in recent years because the price changes were gradual. But even price spikes, like what has been seen in the crude oil market in recent weeks, isn't enough to convince Americans to cut back on their driving.

The average daily demand for gasoline is up slightly so far this year at 9.3 million barrels compared with 9.2 million barrels a day through October 2006, according to government data.