Has the great oil rally of 2011 run its course?

Has the great oil rally of 2011 run its course?
Rising oil prices have become a fixture. The IMF declared this week that costly oil is here to stay, after a 12.5% average annual price increase over the past decade. Wall Street is betting the ranch on further increases. With crude hitting $110 a barrel in New York Thursday, up 17% this year, it's not looking like a bad bet.

Peak gasoline?

But for all the talk of global economic growth and unrest in Mideast oil hotspots, there are signs that oil prices are already too high for pinched consumers to bear. U.S. gasoline demand, for instance, dropped 3.7% over the past four weeks -- which energy tracker Stephen Schork calls a "material decline."
Yet U.S. gas prices hit $3.70 this week, their highest level since the summer of 2008. Retail prices are also soaring in the U.K., where the per-gallon price is nearly double the one here thanks to taxes, and in China, where the government is trying to get a hold on commodity prices by pushing down demand.