Oil, the lifeblood of the global economy, has plunged more than 10 percent in the past five days, to about $93 per barrel Friday, and the compelling question for investors and motorists alike is -- in early 2012 where does oil head?

The oil bulls -- or those who calculate that oil is headed higher -- argue that despite still sub-trend U.S. GDP grwoth, and the threat of a European Union recession, emerging market demand for oil is strong enough to keep oil prices at least firm in the next six months. Institutional investor use of oil futures as a hedge against a weak dollar, higher inflation and/or as an alternative asset adds more buying pressure. 

The oil bears -- or those who calculate that oil is headed lower -- argue that sub-par U.S. job growth, the contracted workforce that has taken more than 10 million drivers off U.S. roads, combined with the sovereign debt-related GDP slowdown, means global oil consumption in 2012 will struggle to eek out a gain, and probably remain at/near 89 million barrels per day (bpd). Moreover, those soft demand conditions will combine with a world awash in oil to drive crude lower -- to below $70 per barrel by March.

One analyst said end-of-the-year window dressing has been a factor in oil's roughly 10 percent slide in the past week.

The market has come to the reality that the European situation won't be tidied up before the end of the year, Phil Flynn, PFGBest analyst, told The Associated Press Friday, and that's prompted many traders to close their positions, and lock-in profits they made in 2011.

But if the European debt crisis and implied slower growth/recession are bearish for oil prices heading in to 2012, the U.S. economy is bullish.

We look for the complex to move into a choppy, consolidation phase into the holiday period, as the euro appears to have stabilized for now amid a fresh flow of supportive U. S. economic guidance, energy consultant  Ritterbusch and Associates said in a note, Dow Jones reported Friday.

Technically, oil's chart is mixed. On the bullish side, oil has uptrended from about $77 in the past three months there is a short-term double-top at that $77 level. On the bearish side, oil is below both the 50-day and 200-day moving averages, at $94.23 and $95.98. Oil will also encounter major, psychological resistance at $100 per barrel.

Oil/Energy Analysis: The bottom line regarding oil's direction in early 2012? Neutral. At this juncture, there's not enough fundamental evidence to make a call, and technical indicators are inconclusive, as well.

A collapsing European economy -- and its trade impact on U.S. GDP -- would certainly tip the scales in favor of the oil bears, but while Europe's growth will be very low in 2012, a major contraction is not guaranteed, at least as of mid-December.

Conversely, improving economic fundamentals in the U.S. point to stronger GDP growth and the possibility to stronger job creation in the first two quarters of 2012, but a hit to global credit markets from the Europe debt crisis would certainly take steam out of the U.S. recovery. Hence, the oil bullish view is hardly an unqualified one.