Oil higher

Oil futures rise on news of decreasing inventory levels at an important distribution point. For the full story, click here.

Crude-oil futures rose nearly 4% on Wednesday, as investors seemed to focus on the good economic news rather than on a bearish oil inventories report.

Inventories at the key Cushing, Okla. delivery point for West Texas Intermediate sold on Nymex declined by 324,000 barrels last week, but the total of 37.6 million barrels is still high and represents a 23% increase from this time last year, Evans said.

The main problem is that there is too much money chasing too little commodity. Sound familiar? Think housing. What has been shown time and again is that it is not the Evil Oil Companies controlling the price of oil, it is the investors. Too many investors with too much money are investing in a smallish market (comparative).

Some of the best evidence of this is that Exxon-Mobile has staked the future of their company on $30-50 per barrel oil by selling much of its leases about 3-4 years ago.


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