Middle-class, affluent, bourgeois, white-collar … they all describe a group of people who enjoy a comfortable life, have access to healthcare and, most importantly, have discretionary income. And across developing nations, there is a growing group of affluent people that are just settling in to this lifestyle.

A few weeks ago we discussed how economic power is gradually shifting eastward and highlighted a McKinsey Global Institute report that showed China, Latin America and South Asia are projected to account for most of the middle class children by 2025. (Read: Middle-Class Middleweights to be Growth Champions).

Those regions aren’t the only ones. Our emerging markets team uncovered this chart for last week’s Investor Alert which shows a surging middle class exists in Eastern Europe as well. China leads the developing world with a middle and affluent class of 149 million—roughly the same size as the combined total populations of Japan and Taiwan.

While China is far ahead of all developing market countries with 149 million members of the middle and affluent class, investors shouldn’t overlook another important trend: The combined middle and affluent classes of the Czech Republic, Hungary, Poland, Romania, Russia and Turkey equal that of China. Among emerging market nations, Russia has the second-largest middle and affluent class with 70 million people; Poland’s rivals that of India.

Turkey, which currently ranks seventh, has especially strong prospects. Already, its middle class is second among emerging markets in terms of GDP per capita at $17,586. In addition, this class is expected to grow at a 5.1 percent annual rate through 2029.

The Development Centre of the Organisation for Economic Co-operation and Development (OECD) Development Centre identifies the middle class population as the “consumer class” because of its importance on consumption levels. We agree with this designation as this class identifies an important global driver of economic growth.

We believe that people with discretionary income will seek to improve their way of life by buying their first vehicle, upgrading their home, purchasing appliances and gaining access to the Internet. For years to come, these middle and affluent classes should drive demand for new or improved infrastructure and needed commodities, thereby contributing to the substantial economic growth in several emerging nations around the world.

After selling off nearly 14 percent the previous week, oil prices finished last week slightly higher at $99.65 per barrel. While the end result was a net positive, the volatility continued. Oil prices per barrel reached $104, then fell to around $96, before nesting just below $100.

As an investor, this volatility can be difficult to handle. Throw in the uncertainty of today’s geopolitical environment, and investors feel the need to downsize their positions in commodity investments, such as oil.

We think markets could remain volatile in the short-term, but here are three long-term indicators to support $100+ per barrel oil prices.

1) Long-Term U.S. Dollar Weakness

The U.S. dollar was up over 1 percent again last week and has increased nearly 4 percent since hitting a 52-week low on April 29. On a five-day rate of change, the dollar is up about 1 standard deviation.

As I said last week, this move is less about the vigor of the U.S. dollar and more about the relative weakness of the eurozone and other fledgling countries. In addition, it’s likely we’ll continue to see relative strength in the U.S. dollar as we get closer to the end of the Federal Reserve’s QE2 program, set to wind down in June.

We think these are short-term drivers and don’t accurately reflect the long-term headwinds facing the dollar. I’ve discussed these often and in an attempt to keep this note brief, I’ll let the following picture tell the story.

This snapshot from USdebtclock.org (taken late in the afternoon on May 13) shows the precarious fiscal and monetary situation of the U.S. As you can see, the overwhelming color is red. Even if Washington decided on a comprehensive plan to fix entitlement overspending, trim defense spending and reduce the U.S. deficit today, it would take years to see any meaningful shift in these figures.

Therefore, we feel the recent uptrend in the U.S. dollar is a short-term reprieve from a long-term downtrend.

2) Demand from Emerging Markets Outpacing Developed Market Demand

While developed world demand has struggled to retrieve its previous strength, emerging markets have captured a significant share of global demand over the past three years. Emerging market countries have narrowed the oil usage gap between developed and emerging markets from roughly 12 million barrels per day in 2007 to just 4 million barrels per day as of late 2010.

Last week, the Paris-based International Energy Agency (IEA) and the U.S. Department of Energy both communicated softness in global oil demand. The IEA noted that preliminary March data shows the first “marked slowdown” in annual growth for the first time since 2009. The IEA is forecasting growth of 1.3 million barrels per day in demand for crude oil in 2011, down from 2.8 million barrels per day in 2010.

This represents a significant slowdown in year-over-year growth and added to negative sentiment around oil last week, but it’s important to put things into context. You can see from the chart that global oil demand grew at an incredible pace in 2010. The 1.3 million barrels of demand growth that is expected for 2011 is less than last year, but is more along the lines with historical rates and maintains the forward momentum for rising oil demand.

Emerging markets, driven by China, are the main source of the increase in demand. You can see from this next chart how China’s demand for crude oil imports has grown over the past decade or so. China imported an average of just under 1.4 million barrels a day of oil in 2002 when prices were hovering around $20 per barrel.

In the years since, China’s crude oil imports have increased more than 260 percent despite per barrel oil prices jumping nearly four-fold. This is indicative of the insatiable demand that emerging markets have for oil.

3) Majority of Global Oil Reserves Located in Geopolitically Unstable Regions

In the April 11 update “Why High Oil Prices Are Likely Here to Stay,” we highlighted how a large portion of the world’s proven oil reserves and production comes from unstable countries and regions, including Nigeria, Venezuela, Iraq, Iran and Libya. According to some estimates, as much as 80 percent of the world’s oil reserves lie beneath these shaky regions.

Civil wars and attacks on oil facilities can create production slowdowns or even shut down production entirely. The conflict in Libya and unrest in several other Middle East countries shows just how quickly this can affect global oil markets. Iraq is another example of the difficulties inherent in production expansion in these regions. Last week, the country’s former oil minister said it would only be able to meet half of its stated production goal by 2017. The original forecast, clearly a lofty one, called for roughly 12 million barrels per day in oil production.

Over the years, the proximity of oil reserves to unrest has led to a reduction in global spare capacity or the excess amount of oil that can be produced, if desired, to meet demand. When the turmoil broke out in Libya, the general consensus was that Saudi Arabia’s spare capacity would be more than enough to meet market demand. That hasn’t been the case as Saudi Arabia has moved to calm its own population to prevent unrest.

The result is little wiggle room to meet demand should we experience a boom in demand or an event disrupting production. In general, these supply/demand dynamics support historically high prices.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.

A few weeks back we highlighted the strong link between GDP growth and oil consumption by showing you how oil consumption per capita has risen in selected countries as per capita incomes rise (Each week, more than one million people are either born in or migrate to cities around the world. Much of this rapid urbanization comes from the emerging world, putting tremendous pressure on that country’s feeble infrastructure. Pipes burst, roads are jammed, the water is tainted and the lights even go out.

Merrill Lynch estimates that $6 trillion will need to be spent by selected emerging market countries over the next three years to meet the basic needs of these citizens. Water, transportation and energy investments will consume the bulk of these funds, accounting for 82 percent of total projected spending. Nearly every emerging market country Merrill researched will make an investment in all three.

While each developing country could benefit from an upgrade, needs vary. This table details how different emerging market countries stand up against each other in terms of quality for the country’s roads, rails, ports, etc. We’ve highlighted the specific areas where the countries rank in the bottom half among the 133 surveyed by the World Bank.

You can see that Brazil has the worst overall ranking among the countries listed. Though the country is a large exporter, the extremely poor condition of the country’s roads and rails has hampered the growth of internal textile and farming industries. However, there is light at the end of the tunnel for the country, as the government already has a plan in place to improve these conditions (Read: Brazil’s Infrastructure Plays Catch Up).

India’s infrastructure also rates poorly, and is slowing the country’s ascent to top of the world’s economies (Read: India’s Achilles Heel). One of India’s key issues is electricity. Merrill says that nearly 40 percent of Indian households do not have access to electricity, the worst of any major developing economy.

Power is also a problem in South Africa where a major power plant has not been built in 20 years and blackouts/power outages have hurt the country’s mining industry in recent years. Merrill projects $54 billion will need to be spent on the country’s power system over the next three years, accounting for nearly half total infrastructure spending.

China, which accounts for more than half of that $6 trillion estimate, ranks far above emerging peers in terms of infrastructure at the 65th percentile. Merrill says that one of China’s biggest needs is in water and environmental development. The firm estimates that the Asian country will need to build roughly 40,000 reservoirs at Rmb 12.5 million a piece to create an internal water distribution system and alleviate pressure when regions experience extended droughts such as what China is seeing presently.

The needs of a growing global population set to reach 7 billion later this year and investment needed to supply these people with sufficient water, roads, housing and power is why we identified infrastructure as a megatrend in 2007 and made it the key investment theme of the Global MegaTrends Fund (MEGAX).

Although some infrastructure investments, such as those in Russia, have seen delays as fiscal dollars have been diverted during the financial crisis, we continue to believe in the long-term viability of the story.

Read How Policy Reforms are Paving the Way for Indonesia

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"http://www.usfunds.com/investor-resources/frank-talk/Energy-Natural-Resources/The-Strong-Link-Between-GDP-and-Oil-Consumption-5331/">Read: The Strong Link Between GDP and Oil Consumption).

Specifically, we noted the potential for China’s oil consumption—already the second-largest oil consumer in the world—to catch up on a per capita basis with other Asian countries such as Taiwan and South Korea.

That’s where we think China’s oil consumption is headed, but this chart from Carnegie shows how strong oil consumption per capita growth has been over the past 50 years. Back in the days of Chairman Mao, China’s oil consumption per capita was roughly 0.2 barrels per year (b/y). When Deng Xiaoping took over in 1982, that figure had grown to roughly 0.6 b/y.

Since then, there’s been no looking back. China’s oil consumption per capita has increased over 350 percent since the early 1980s to an estimated 2.7 b/y in 2011. In fact, consumption per capita has risen nearly 100 percent in just the past decade.

Oil consumption per capita in the U.S. currently ranks among the top industrialized nations in the world at 25 b/y. However, today’s consumption levels are approximately 20 percent lower than they were in 1979.

China isn’t the only emerging country to show big increases in per capita consumption; in fact, the growth in consumption for several other countries far outpaces China. You can see from this next chart from Carnegie that consumption per capita in Malaysia has nearly quadrupled since the mid-1960s. Consumption in Thailand and Brazil has more than doubled to roughly 5.7 b/y and 4.8 b/y, respectively.

Meanwhile, many developed countries—especially those in Western Europe, have experienced substantial declines.

Today’s per capita consumption in Sweden is roughly 12 b/y, down from 25 b/y in the mid-1970s. That’s one of the largest declines in the developed world over that time but isn’t the only one. France, Japan, Norway and U.K. all use less oil on a per capita basis than they did in the 1970s.

This trend is why we feel emerging countries, especially Asia, are the epicenter of oil demand growth for years to come.