Here's what I'm pondering, tell me where I'm wrong. In the bearish scenario, the dollar continues to devalue in a severe way, even without internal inflation, oil stands to gain because as during the early 70's, OPEC nations refuse to continue to accept (from the entire world mind you) a stream of devalued USD. That equates to external price inflation, which ripples back home and causes internal inflation by the very fact that oil is a driving factor behind the delivery system of the entire U.S. economy, even when there is no economic growth (i.e., no increased domestic demand). In the bullish scenario (and I use the term lightly), a few things happen (maybe either-or, maybe both). One is that we start to see real growth, and thus an increase in domestic demand. If we see real growth, it will likely mean that the consumer is a stable factor here in the U.S., and thus we will again become a strong pillar for the Chinese export-driven economy. This of course means China's appetite for growth will increase even further (with a stronger support), and they too will increase demand for oil. Once again, oil prices will increase due to increased demand. One X-factor in both scenarios are production output. Leave those out for the moment, we can get back to that later. The other X-factor is event driven volatility as a result of tensions between the U.S./Israel/Iran. Runups to potential armed conflicts have historically caused spikes in oil prices (Yom Kippur war, Iranian Revolution, Iran/Iraq war, Gulf War, Iraq War). Ironically the Suez crisis didn't seem to drive oil higher, and true we can argue about what other catalysts were in place during the runups to these wars (weak dollar, see above). The point is, a potential conflict between the U.S./Israel/Iran in the mid-term/long-term future could likely cause a run up in oil prices, until the point in time when the resolution or even the decided action between the western countries is made clear. Given that any of these 3 scenarios are all possibilities, where does oil stand to lose? The one area I can see that kills oil is spiraling deflation, which could only be touched off by not just one rate hike, but a series of desperate hikes in an attempt to chase down significant inflation. So is oil priced right for a good long term play? P.S. The potential for dollar carry unwind would more likely hurt equities, and possibly precious metals, but not oil, right? Looking for all opinions, agree or disagree? Where am I going wrong?