Crude oil closed on Friday at $97.89 per barrel, well below the peak of $145.31 that occurred in July 2008. Several economists have suggested that if prices remain above $120 or $125 for a sustained period, consumer spending (non-energy-related spending) will decline enough to cause a recession. It’s hard to determine what a “sustained period” might be, however. Prices stayed above $120 for about three months in the summer of 2008. The economy worsened sharply in September 2008, but that was caused by the financial crisis, not energy prices. High oil prices will lead consumers to curtail driving, use mass transit, turn down the thermostat and adopt other money-saving strategies, so the economy has some flexibility to absorb high prices at least for a few months. Prices in the near term will be subject to considerable geopolitical risk as events play out in the Middle East. Longer term, prices will come under upward pressure from strong growth in emerging markets around the globe, and this is true for agriculture and commodity prices as well. As for commercial real estate, shopping centers will be most exposed to rising oil prices due to the potential impact on consumer spending. The industrial market also will feel the impact as fewer goods flow through corporate supply chains. And the supply chains themselves will come under increased scrutiny as shippers substitute rail for truck usage where possible. It’s too early to predict that these scenarios will occur, but they would be the logical outcome if prices continue to rise and then stay high.