A couple of months ago, I would have bet that oil would probably peak out this summer in the upper $60's, and possibly move back through the psychological $70 mark, but it is starting to look like I would have been wrong. We have yet to hit the heart of the high demand summer driving months, and oil is already poised to break through $70 a barrel.

When we looked at oil prices yesterday we mentioned that the first place you are going to feel the recent jump in price is going to be at the gas station. And today, you will be seeing another slight jump in price as the national average for a gallon of gasoline moved over a penny higher last night to a current national average of $2.525.

Oil prices reached a new 6 month high today, following a weekly inventory report that lead investors to believe that demand is rising for the precious crude.

Going into today's report from the Department of Energy, analysts had been expecting to see a drop of around 1.5 million barrels, but the actual drop came in larger than expected, with a reported 2.1 million decline in inventories for the week ended May 15.

When we took a look at oil prices last Friday oil was hitting a new 6 month high, and we noted that we could be seeing $60 oil by the end of this week. We did indeed see oil hitting $60 this week, but today prices took a hit, dropping back down under $57 a barrel.

The main reason prices retreated today was in reaction to disappointing news on retail sales, unemployment, and more bad news from the housing market. Oil has dropped $2.10 a barrel today to $56.52, and some analysts think that it still has a way to go before stabilizing.

Oil continued its charge today and traded up 3.4% to close the week out at $58.63 and creates a situation where we could very likely be looking at $60 oil again by the end of next week. The last time oil was trading this high was all the way back on November 11.

On Monday we looked at oil, and noted that a big reason for oil's recent jump is increasing optimism towards the overall economy, and that is still the case. The Labor Department reported a drop of 539,000 non-farm payrolls in April, lower than the anticipated loss of 610,000 jobs.

Oil prices have been steadily heading higher the past month, and today was no exception, as the precious crude managed to close today's trading at its highest value in 2009.

While we are still no where near the record high prices we were seeing last summer, oil has managed to slowly creep its way up to $54.58 a barrel. This was after a rise on the day of $1.73, and it is a clear sign that analysts believe that global demand is about to move in oil's favor.

Put yourself in the shoes of the OPEC ministers meeting this weekend in Geneva. They will be sitting down and discussing the current supply/demand for oil in the coming months. The world is in crisis and OPEC has cut oil production several times over the past year. Now they must decide again what to do.

Here are some cold facts. OPEC expects oil demand to fall by 1 million barrels per day in 2009. That in itself is not so unusual, but now look at the one. Demand growth from developing countries is shrinking by 80% compared with last year. There is a glut of oil in storage and in tankers around the world, with estimates of a 57-day supply. This excess supply is unusually high by OPEC's standards.

While the markets may have been able to move higher today, despite a weak jobs report, oil was not so lucky, with traders pushing oil prices down below $40 a barrel.

By the end of the session, oil had inched back slightly higher, and closed the day at $40.17, after breaking through the psychological $40 barrier and hitting an intraday low of $38.60. Traders pushed oil prices lower on the news of deep job cuts in January.

There are two competing forces at work in the oil market. On the one hand, OPEC has already cut production by 4.2 million barrels per day since last September. OPEC's secretary has said the producer group was willing to make further cuts when it meets in March. The price of crude has been holding steady near (above or below) the $40.00 per barrel mark.

Another factor weighing on the market is the threat of some 30,000 U.S. refinery workers who may go on strike. This can bring our refinery capacity to a virtual standstill. In Britain, workers staged an unofficial walkout on Friday in protest over the use of foreign workers.

Oil prices flirted with the psychological $40 barrier today after a report from the U.S. government showed that inventories swelled much more than expected last week.

Going into today's weekly inventory report, analysts had been expecting to see in crude inventories of around 1.9 million barrels. While that would have been a bearish indicator in its own right, the actual figures were a much more bearish reality that U.S. demand is still not picking up as we would like, as actual oil inventories rose by a massive 6.1 million barrels for the week.

It's been a tough day all around for oil, as the market has been hit not only with today's bearish inventory report, but also news earlier in the day that new home construction in December hit an all time low, and that Asian economies have been extremely hard hit with recessions of their own.

Oil prices have dropped sharply today as traders focus on increased demand concerns following this week's oil inventory report.

Going into today's inventory report, analysts were expecting to see an increase in oil reserves of around 1.5 million barrels. However, the market was shocked to see that the actual increase last week was well above that figure, as the Energy Information Agency announced that inventories grew by 6.7 million barrels.

The result? Oil prices have dropped over 9% in today's market, falling $4.54, down to $44.04.

Oil prices are getting a big boost today, as investors are betting on hearing news of huge production cuts coming out of OPEC this week.

With oil well off its highs from over the summer, many had already been expecting to see OPEC step in and cut production, but earlier this month OPEC made it clear that it wants to shock the market into sending prices higher.

Prices have moved up over $50 a barrel today, hitting a high of $50.05, but have cooled off slightly and are currently sitting at $49.25, up $2.97 as we await to hear exactly how deep the production cuts could run.

For those of us who were dying for relief from record high gasoline prices this summer, the recent drop in oil prices comes as great news, but this is not the case for everyone. OPEC, which supplies the world with roughly 40% of its oil, would like to see prices rise higher again, and today gave a clear sign that larger than expected production cuts are on the horizon.

In an interview today, the President of OPEC, Chakib Khelil, stated that a consensus had been reached for cuts at the next meeting of the oil cartel. The next scheduled meeting is on December 17, and according to Khelil, the market will be surprised.

Khelil stated that the he felt the best way to get a quick boost in oil prices is to shock the market, and he felt that the upcoming production cuts would be able to do just that. While he did not indicate exactly how large the production cuts would come, he left no doubt that they will be substantial.

"The stronger the decision, the faster prices will pick up," Khelil said.

Oil prices got a boost today from the news of a large interest rate cut in China, which analysts believe should have the result of lifting oil demand for the country.

China is doing all it can to keep its booming economic growth alive. The country announced its largest interest rate cut in 11 years, as the People's Bank of China slashed rates by 1.08 percentage points.

Oil prices, which have been in a virtual free fall since their record high levels over the summer, moved up as high as $52.76 earlier in the session, and are now trading up $1.40 a barrel to $51.75.

The move by China should help the country rebound from the current slowdown it is seeing in economic growth. The massive expansion of the economies in China and India are a major reason why oil prices moved so much higher in the past couple years, and if today's announced cuts have the intended effect of increasing economic activity, then the country should indeed see an increase in its thirst for oil.

In a new report today, the International Energy Agency warned that an insufficient amount of investment into oil supply is going to result in a serious supply shortage that could make the recent record high oil prices look weak in comparison.

Oil prices spiked to a record high $147 a barrel earlier this summer, but have since been in a pretty steady downward spiral, and were down again today, as the credit crunch and recession fears have created fear among oil investors that oil demand is going to erode over the months to come.

Prices were off sharply again today, and in afternoon trading oil was down another $3.17 a barrel to $56.16, off 5.3% on the day, as the U.S. government lowered its forecast for oil next year to $63.50, down from its previous estimate of $112 that it maintained back in October.

As we discussed last Friday, the recent drop in oil prices prompted OPEC to meet earlier than planned to discuss possible production cuts, and that is exactly what the group of oil producing countries has decided to do, with an announced 1.5 million barrel a day production cut.

It should not come as too much of a surprise to hear about today's plans. Oil has been falling sharply over the past few months, with a $40 price jump in the last month alone. Over the summer we were talking about the record high oil prices, and it was only this past July when prices were nearing $150 a barrel. How times have changed.

Even with today's announcement, oil is down again, as the market continues to worry about a spreading global recession. Earlier in the session oil dropped as low as $61.00 a barrel, and is currently trading down $3.24 to $62.68.