Oil Update: Oil is now above $90 per barrel. This latest push higher by oil was blamed, for the most part, on tensions between Turkey and Kurdish Workers Party (PKK) rebels seeking Kurdish independence, which threatens to disrupt oil transport in northern Iraq. Crude oil reached new nominal high Friday of $92.22, although in real terms the price is still below oil's inflation-adjusted high of $101.70 set in April 1980 during the Iran hostage crisis.

Here's a snapshot of crude oil market conditions using three analytical frameworks, or measuring sticks, if you will, with a note on several intangibles:

Geopolitical: Add the Turkey/Kurd dispute to Iran (nuclear technology/weapons) and the Iraq War ,to confrontations and military actions that are adding a "war premium" to the price of oil. Depending on the analyst, that war premium has inflated crude oil's price by $10-$25 per barrel. Political unrest in Nigeria and a hawkish stance in Venezuela also items on analysts' radar screens.

Fundamental: Rising crude oil demand in Asia [primarily China], the United States (No. 1 in the world in per capita consumption), along with significant oil use in Europe, reveal a continued strong market for oil, despite its elevated price. In other words, demand destruction -- when people reduce consumption because the price is too high -- has not started yet. Further, the U.S. Energy Information Administration projects that global oil consumption will reach 85.8 million barrels per day in 2007, up 8% from 2003, and 87.2 million barrels in 2008. Analysts say at some price level demand destruction for oil's products (including gasoline) will occur. But that day has not arrived yet.

Technical: Oil's chart indicates that short term, crude is overbought; the price closed Friday above the top Bollinger Band, and its relative strength index is 73, each of which suggests a short-term price decline is ahead. Long term, oil's chart looks strong: oil has cleared major resistance in the $80-$83 range, it is above the 50-day and 200-day moving averages, and the chart displays a constructive advance-and-minor-correction pattern. Oil also has strong support at $82, $80, $77, and $70, and the aforementioned 200-day moving average, at $68.60, looks very far away.

Intangibles: Hedge fund/investor speculation, efforts by large consumers to lock-in fixed prices for large amounts of oil [called "hedging"], along with the decline in the U.S. dollar (oil is priced in dollars), have also contributed to oil's elevated price.

Oil Analysis: Short-term, oil looks overbought and vulnerable to a substantial pull-back, but the much more important point is that long term, after that pull-back, fundamental and technical factors indicate that oil is poised to continue to move higher. In other words, absent demand destruction, oil's elevated price remains, and the long-term up-trend remains intact.