Oil Surges Back Toward $90

Oil moved up to $84.69 on a path that may well take it above $90. US stockpiles were down 4.1 million barrels according to the American Petroleum Institute. OPEC has said that $90 oil will not hurt the global recovery.

“We can expect higher prices, maybe up to $90 or even higher,” said Sintje Diek, an analyst with HSH Nordbank in Hamburg told Bloomberg

Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates, said oil markets appeared to be “borrowing” from the expected strength of prices after the Fed unveils its latest program to stimulate the U.S. economy, The Wall Street Journal wrote.

In addition to these factors there are concerns that:

The winter in the northern hemisphere will be extremely cold based on ice which has melted off the Arctic cap and will lower temperatures in the oceans.

OPEC may cut production so that the treasuries of its members can make up for a loss of income based on the dollar.

And, there are still fears that political instability in Iran, Nigeria, and Venezuela could affect supply

Douglas A. McIntyre