Exxon Mobil (XOM) trades higher on record oil prices -- Will the climb continue?

When OPEC met today, the twelve nation oil cartel decided to increase its daily output, but you wouldn't have guessed that by watching oil prices today. Oil companies like Exxon Mobil Corp. (NYSE: XOM) had a great afternoon of trading as oil traded up to close at a record high $78.23.

Earlier today we saw how OPEC, led by Saudi Arabia had decided that it would increase output by 500,000 barrels a day, but the market looked past this and instead decided to focus on government data that indicated a supply crunch later in the year, and reports that today's increases will not be able to meet the growing demand.

According to the Energy Department , global petroleum consumption could easily increase 1.27 million barrels to 85.7 million barrels a day this year, and that demand will increase by 1.8 percent, to 87.2 million barrels a day in 2008.

The report contradicts the opinions of several OPEC countries which have asserted that supply and demand are in good balance at this time. The market will get a better picture of the current situation tomorrow when we get our weekly inventory report from Energy Information Administration. Analysts are expecting to see a draw of 2.7 million barrels last week.