It would appear to be axiomatic to say that there are few benefits from an oil price over $100 per barrel. Nevertheless, during oil's latest climb to the stratosphere, some have argued that a high oil price is 'net-positive for the global economy,' or 'a long-term good thing.'

Economist Glen Langan has a word for insta-analysis like the above. "Misguided," he calls them.

Not that Langan is an ardent advocate of oil use; hardly. Would that the developed and developing world could shift today to an alternate, renewable, and more environmentally-friendly energy form, he says. But the world can't, and as is some times the case in social science circles, "the normative influences the empirical," he says, and leads to curious conclusions like an 'oil shock being net-positive for the global economy.'

For the record: an oil shock is never net-positive for the global economy, Langan argues.

There are some benefits, to be sure, such as increased conservation, increased research on alternate/renewable energy forms, a transfer of some wealth to some developing nations and, of course, astounding increases in wealth in those connected to oil and oil services, but the overall effect is net-negative. Oil traded Thursday up $5.46 to $121.42 per barrel.

Oil's record price rise in 2007-2008 rivals price increases during the two previous oil shocks, in 1973-74 and 1979-80.

Moreover, while we'll leave for sector analysts and economists to declare if oil's 100% gain in 2008 and 400% gain since 2000 qualifies for an oil shock, those analysts and economists generally agree that the price rise has been driven by rising demand, particularly increased demand for oil in emerging markets, such as China and India.

However, that's not to say that the weak dollar and speculators / institutional investors have not affected the price of oil to the upside: they have, economists generally agree. Further, most analysts also believe oil's price contains a 'geopolitical / civil unrest risk' premium, as well. But all of the aforementioned does not blot-out the primary driver: the fact that about 1 billion new consumers of oil in emerging markets (in the form of car owners, factories, and commercial trucks) are being incorporated into the industrialized world, as the initial decade of globalization progresses.

Given the demand characteristics, and ignoring. for the moment, conservation / efficiency issues and alternative energy sources, a natural question concerns supply. Are there any nations that could increase supply by large amounts? Indeed there are three, but the answer is not as simple as 1-2-3.

The 3 major oil reserve nations

• Iraq – The possessor of the third largest proved reserves (115 billion barrels), Iraq's oil production has been depressed by the Iraq War, and delays in massive required repairs to its infrastructure. By extension, a sustained increase in production assumes a cessation of hostilities and a political solution, and these are not on the immediate horizon. But the point here is that Iraq is capable of producing 6, 7, even 8 million barrels of oil per day, given investment and a stable government. Iraq's current output is about 2.5 million barrels per day, according to the Middle East Economic Survey.

The April 2008 producer price data indicated that inflation, as measured at the business or wholesale level, is accelerating. But investors and consumers shouldn't be surprised, so says economist David H. Wang.

"It's beginning to look like a re-run of a show we don't want to see, 'That 70s inflation show,' " Wang said. "Oil is increasing inflation throughout the U.S. economy and you can really see it at the producer level."

During the past 12 months, producer prices have increased 6.5% and the core rate has risen 3.0%, according to U.S. Labor Department data released Tuesday. Other producer price index surges occurred in 1974, 1980, and 1991. What do the three have in common? You guessed it. They were periods when the price of oil increased by a large percentage, Wang said. The 1991 event was more of an oil spike, but the other two were the first two oil shocks, in 1973-1974 and 1979-1980, he said.

Oil's current march higher, up 100% in the past 12 months to about $129 per barrel, and up about 480% since 2002, does not qualify as an oil shock just yet, but it's close and getting there, Wang said, and inflation has trended higher in tandem with oil's latest run-up.

With oil setting yet another record high Friday of $127.43 per barrel and Goldman Sachs renewing traders concerns about inadequate oil supply growth, economists and business executives are becoming increasingly concerned about gasoline prices in the quarters ahead.

U.S. gasoline prices are already up more than 100% since 2004 to a national average of about $3.78-3.83 per gallon. (Many high-cost zones, such as New York, Boston, San Francisco, and Los Angeles, are already experiencing prices well over $4 per gallon.) By any gauge, gasoline's surge is one for the record books - - rapidly approaching percentage increases registered during the first two oil shocks, in 1973-74 and 1979-80.

Given the run-up, how much higher can gasoline prices rise?

First, some may ask, why the emphasis on gasoline prices? In a nutshell, economists obsess over gasoline prices because, unlike the rest of the developed world, the United States has out-sized per capita energy consumption. That's econospeak for 'Americans use many more gallons of fuel to commute to work, do errands, etc. than their counterparts in Europe and around the world.'

United Airlines, the second largest U.S. carrier, increased almost all domestic airfares by 3-5%, due to surging fuel costs, The Associated Press reported Friday.

It was the third increase in the past two weeks, The AP reported, for United (NYSE: UAUA), which like the U.S.'s other major carriers, is struggling to maintain a viable business model amid the largest increase in aviation fuel costs since the world's second oil shock in 1979-80.

Shares of United fell 82 cents to $14.58 on the news in Friday afternoon trading.

United's latest fare hike takes place just two days after Delta Air Lines (NYSE: DAL) CEO Richard Anderson said domestic carriers will need to raise tickets 15-20% just to break even at existing fuel prices, The AP reported.

Surging fuel costs

Independent stock analyst C. Leonard Bauer, formerly of Prudential, said cost factors affecting aviation will create a stark travel choice for business and leisure travelers, at least for the immediate future, including this summer: if you're flying a few months from now, there's an 80-90% chance you'll pay considerably more, he said.

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Wall Street and academia are two fields that publish a great deal of research, albeit for different objectives and audiences.

Wall Street has a tendency to emphasize mainline research, a process that produces a great deal of specialized, up-to-the-minute research, but one that also can sometimes overlook -- even intentionally exclude -- research by niche or lesser-known researchers.

In focus: oil

One example: oil prices and the U.S. economy. Wall Street abounds in research describing oil's impact on U.S. GDP. As most investors/readers know, the current consensus holds that as oil prices rise, the U.S. economy slows, and if it rises too high it can throw the economy into a recession.