We have been keeping a close eye on oil over the last week or so wondering just what it was going to take to push the precious crude over $60. Last week I made the prediction that yesterday would be the day that we saw it bust through $60 for good, but I was only partially correct in my prediction.

In fact we did see oil trade up to touch $60 yesterday, but that was as high as it got and never was able to trade above the $60 resistance point. As it turned out, after hitting a high of $60 yesterday, crude prices settled at the end of the day at $58.88. A big reason for the uncertainty was that traders were cautious regarding what we would see with today's weekly inventory report from the Energy Information Administration.

Well, the numbers are in, and what we are seeing is oil moving to the upside again today as inventories did fall more than analysts had been expecting. Looks like the cold weather is starting to have the impact that we were anticipating.

According to today's report, distillates, which are used to make heating oil, fell by 3.7 million barrels, a half million more than the estimated 3.2 million barrels analysts had been expecting. Oil inventories also surprised with a decline of 400,000 barrels instead of the anticipated increase of about 1.4 million barrels.
All in all, the combination of inventories and continued wintry weather across North America has put precious crude back on the rise with prices trading up $0.84 to $59.72.

Will we finally see prices settle above $60? I wouldn't expect to see that today. While I really don't want to be so bold as to make another prediction on when we will see this, if I were forced to look into my crystal ball once more I would suggest that we will see prices closing around $59.50 today and finally settle above $60 tomorrow.

What are you thoughts? Are we about to say goodbye to prices in the $50's for good? Let us know what you think.

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