Oil Closes Near $80: Will It Last?


The stats are very bullish.”

– Tony Rosado (subscription required), IAG Energy Brokers

Oil closed today at an all time high around $80 a barrel.

Despite OPEC deciding to raise production by 500,000 barrels a day yesterday, oil still managed to hit an all time record (subscription required).

And then today’s government report showed a drawdown in crude inventories which caused oil to shoot towards $80 (subscription required).

Personally, what I find interesting is the disconnect here between the numbers like supply, demand and inventories and the fact that a slowing economy will reduce demand for oil.  In other words, even though demand is likely to decrease supply is so tight that that’s sustaining record pricesBut I wonder if slowing demand will eventually take some of the punch out of oil.

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