On the Georgia Straight's home page, you'll see Gwynne Dyer's latest column on oil prices, in which he predicts they will level off and start to decline.

However, an article in today's New York Times suggests that there are still serious concerns about a growing imbalance between demand and supply.

The International Energy Agency forecasts consumption to increase to 87.2 million barrels per day this year, up 1.2 million from last year.

But production from three large non-OPEC producers—Russia, Mexico, and Norway—has stalled. Meanwhile, demand continues growing in India and China.

No doubt demand will escalate further in India after Tata Motors unveils its one-lakh (CDN$2,500) car.

Part of the problem is in India, the government heavily subsidizes oil prices. To do otherwise would invite a revolution by taxi drivers and others who rely on low oil prices to feed their families. It's a big enough issue that it could topple the government in future elections.

So India will likely continue to try to keep a lid on prices at the pump, which will do nothing to curb consumption.

Meanwhile in the United States, Democratic presidential candidate Sen. Hillary Clinton has called for some sort of relief for U.S. motorists this summer.

If the U.S. starts subsidizing gasoline prices, that elevates the likelihood that demand will not fall off.

In other words, if politics trumps economics in the U.S. just as it has in India, it will push oil prices even higher. Matt Simmons, an author and U.S. investment banker who specializes in the energy sector, predicted in 2005 in the Georgia Straight that oil prices would reach $200 per barrel.

If that happens, our columnist Gwynne Dyer could find he has some egg on his face by this time next year.

I actually like it when columnists make predictions even though it's impossible to prove their accuracy at the time. So I applaud Dyer for going out on a limb like this.

It's worth mentioning that Dyer was remarkably prescient in his book Ignorant Armies with his predictions about what would happen if the U.S. invaded Iraq.