Earlier in the month we heard from the National Weather Service to expect warm weather through the the first week of December at least. We have seen just that. Temperatures in New York, for example, have been hovering around 60 degrees this week, unusually warm for this time of year. But now the forecasts are turning and we should be looking for temperatures to drop by about 20 degrees this weekend and even lower as we head into next week, which would create an increase in demand for winter heating oil.

The surprising news out today was the Energy Information Administration's weekly inventory report. With the recent warm weather, analysts had been expecting to see a rise in distillate supplies, used to make heating oil and diesel fuel of around 400,000 barrels. That did not materialize and what we witnessed was a surprising decline in inventories of around 1 million barrels. Combined with the upcoming weather forecasts, oil has finally found some legs to run on.

As oil has been moving higher, so have a couple of stocks that I like to watch. Shares in both ExxonMobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) have traded up to new 52 week highs today. XOM hit a new high at $75.53 and is currently trading at $75.51, up 1.35, or 1.8%. CVX has seen it's stock move up 1.9% today as well to $71.21, up $1.33 after setting a new high of $71.31.

These stocks continue to show the greatest strength in the industry and have performed amazingly in the face of falling oil prices. Should oil actually manage to break through resistance and trade to the upper $60s these are two stocks that could shoot to the moon.

So the next couple of days should give us a better idea of where the market is heading and if we can expect higher prices to close out the year. Should be an interesting second half to the week!

Michael Fowlkes has worked as a stock trader for seven years and spent the last 2 years working as an analyst for the online investment advisory service Investor'sObserver.