Further, the IEA said that at least part of oil's $100 price "is surely that higher stocks would provide more comfort," the Agence France-Presse reported Tuesday.

In addition, the IEA agreed with an earlier prediction by Saudi Arabia that high oil prices are here to stay. The IEA added that "only a protracted and severe recession" could drive prices below $60. Earlier this month, Saudi Arabia, holder of the largest proved oil reserves in the world, said higher-cost oil fields, such as oil shale and oil sands, will make it hard for oil to drop below $60 per barrel.

The above forecast differs with the cyclical theory forward by other oil industry analysts and researchers. Briefly, that theory argues that in the prime automobile transportation age, 1965-present, oil's price experiences peaks and troughs, with troughs appearing every 10-15 years after a peak, and vice-versa. Oil's last trough occurred in 1998, when oil fell below $20 per barrel, in current dollars.

Oil Analysis: The key point here is IEA's prediction that high oil prices are here to stay. Further, this is one monthly report where supply and demand statistics may mean very little, because oil's current price reflects, at least partially, buying activity by institutions seeking a promising asset as a substitute for likely sub-par performing U.S. stocks, and oil as an inflation hedge. In other words, oil's price does not reflect fundamentals alone, and paradoxically, oil's price is unlikely to drop substantially until the U.S. economy strengthens, boosting the prospect for stocks, and drawing money out of oil.