Brace for $150 Oil —and $4.50 Gas

Enjoy the relative lull in gas prices while it lasts: Barron's cover story projects $4.50 a gallon "will become the norm" by next spring. "That will put a huge dent in consumer wallets, while ramping up the desirability of fuel-efficient cars," writes Gene Epstein. He projects that oil prices will begin rising in the fall and eventually settle at $150 a barrel. This "oil shock" will put an obvious crimp in the economy recovery "but not kill it," he writes, adding that oil will remain at the $150 level for several months before easing.

"The US economy is never completely ready for higher oil prices, which is one reason they take a nasty economic toll when they arrive," writes Epstein. "But readiness can be enhanced by awareness of the likely outlook for petroleum prices—and the outlook today is relatively grim, although probably not disastrous." (More oil prices stories.)