Now the Sh+*&^ actually is hitting the fan

OK, frequent readers have known for some time that we are teetering on the brink of oil supply chain collapse with no viable options in sight.  In light of basically no spare capacity in the system world-wide, the price of oil is being set by the marginal producer and the marginal event.  This turns small events into big price changes.  So here we were yesterday at $80 oil without any REAL events having driven us there.  Now there is an event:

Al-Qaeda bombs Iraq pipeline, oil hits new record above $81
The Associated Press is reporting that Al-Qaeda was responsible for a bombing that fractured an oil pipeline near the northern Iraqi city of Beiji, sending crude oil spilling into the Tigris River. The oil spill has already traveled 60 miles downriver to the town of Tikrit, which was forced to close its water station. Crude oil rose to more than $81 a barrel for the first time. Libya’s top oil official said today it’s too early for OPEC to consider a further increase in output to combat record prices.  Crude oil for October delivery was up 83 cents to 81.40 a barrel at 2:07 p.m. on the New York Mercantile Exchange.

Where are we going?  I believe $90 by Thanksgiving.