Oil Prices Raising to Over $86

Posted Oct 15, 2007 by ashley.woods4
Not surprisingly, oil prices have once again reached an all time high. Just over the weekend crude oil prices rose $2.44, from $83.69 to $86.13. Crude oil production continues to fall while the demand rises - not a good combination.
The estimates add to sentiment that crude supplies are tight. Last week, the Energy Department reported that domestic crude inventories fell during the week ended Oct. 5 when they had been expected to rise. And the International Energy Agency concluded that oil inventories held by the world's largest industrialized countries have fallen below a five-year average.
Last month OPEC made the decision to increase production levels by 500,000 barrels of oil per day. Yet, at the same time demand for oil will likely increase by 100,000 barrels of oil per day.
"The fact that U.S. crude inventories fell yet again ... reinforced the market's underlying concern that demand has yet to slow down sufficiently to allow stocks to build, while supply is also perceived to be struggling to catch up," wrote Edward Meir, an analyst at MF Global UK Ltd., in a research note.