Oil futures climb on inventory data

Oil prices have been on the move today, climbing over a dollar following this week's inventory report. According to the Energy Department's Energy Information Administration, last week oil inventories dropped for the fourth straight week.

Analysts had been expecting to see inventories fall, but had been expecting to see a decrease of only 800,000 barrels for the week when the actual draw was 3.5 million barrels.

Today's jump is a sign that traders are still willing to overlook fears of a slowing economy and focus on the inventory picture. As the subprime mortgage mess has created widespread fear of a possible recession waiting ahead, oil has fallen pretty sharply from its last month's highs. After hitting a record high of $78.77 on the first of the month, precious crude fell as low as $68.63 last week, a 12.8% selloff during the month.

Oil prices have traded up $1.01 today to $72.74 and hit a high earlier in the day up at $72.93. With today's move, we have seen a 6% rebound from last week's low, but traders should still be skeptical of oil heading back up too much past the $74 or $75 level.

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.