Oil crosses $110, despite supply rise

[Canuck_Buck]

NEW YORK (CNNMoney.com) -- Oil prices rebounded to another record high Wednesday afternoon after initially plummeting when a government report said supplies of crude and gasoline had risen much more than expected.

In afternoon trading, U.S. light crude for April delivery surged to a high of $110.20 before closing at $109.92. Oil had traded as low as at $107.09 following the report's release on Wednesday morning.

http://money.cnn.com/2008/03/12/markets/oil_eia/index.htm?cnn=yes

In its weekly inventory report, the U.S. Energy Information Administration, a government agency that measures oil and gas supplies, said crude stocks rose by 6.2 million barrels last week. Analysts were looking for a rise of 1.6 million barrels, according to a Dow Jones poll.

Gasoline supplies rose by 1.7 million barrels, significantly more than the 300,000 barrel rise that analysts had forecast. The government said gasoline stockpiles are well above average for this time of year.

[shepdogwv]

it's a fear and speculation rise

[kevin1]

ORIGINAL: shepdogwv

it's a fear and speculation rise

Exactly, and when demand doesn't support the huge price increase at the pump the price will recede.

[etothepii]

ORIGINAL: shepdogwv

it's a fear and speculation rise

That's what I'm thinking, and posted in another thread. We' may be experiencing an oil bubble. What will the fallout be when it pops?

[shepdogwv]

I think we do have an oil bubble....with our slowing economy and the fact that the supply is pretty good I think we're in for a price decrease. I don't think it will be a big crash, but I did read a report from one place that said they expeced oil prices to decrease to about 70.00. I really think this is the herd mentality that oil is going to keep going up and up, and eventually the speculators, people that have these unreasonable fears are no longer going to be able to ignore the fundamentals and try to take their profits and get out.