After yesterday's big jump in oil prices, it looked as though we might see the precious crude break through the psychological $110 barrier today, but that has not been the case. Oil hit a high of $109.64 earlier in the session, but is currently trading in the red at $108.38, down $0.71.
Yesterday's move was more a result of traders betting on future interest rate cuts that it was fundamentals justifying oil trading around the $110 mark. As recession fears continue to linger, you can be sure that interest in commodities will remain high, and oil prices will keep trading at near record levels for at least a little while longer.
Also, as I noted last week, we are quickly approaching the summer driving months. As we see gasoline prices at record levels, we have to expect to see prices creeping even a bit higher as demand starts to build this summer. In fact, last week we were given data that gasoline inventories were falling and demand was increasing. This was the first time since back in January that gasoline demand rose.
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