It seems like everyday we are seeing new highs for oil, and today is no exception, with prices hitting a high today of $106.42, and are currently trading up $0.84 to $106.31.It is not surprising that as we see oil continue to head higher, we also have the other side of the coin that shows the dollar falling to new lows. As the market continues to push the dollar lower, you have to wonder just how high oil is headed? It took so long for oil to break through the psychological $100 barrier, and now, as Joseph Lazzaro pointed out earlier, there is already talk of a $100 floor for oil.
Last night we saw oil close at an all time of $105.47, and judging by the looks of things right now, we are going to be setting yet another record close again today. For now it looks as though there really is not too much that could turn the recent price surge around.
This week the market was impacted by a surprising decline in U.S. inventories, and the official (albeit expected) announcement from OPEC that it would not be lifting production quotas. Look for oil prices to remain strong at least until the middle of next week, and depending on next week's inventory report we could easily be looking at $110 oil. Scary... but definitely not out of the question at this point.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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