The story of the day is about oil. February contracts for Brent crude are trading at $98.03 per barrel, up 74 cents as of 10:15 a.m. EDT. The U.S. benchmark West Texas Intermediate crude (WTI) is trading at $91.85 per barrel, up 42 cents. Brent crude is used primarily in Europe. The drive to $100 per barrel is due in part to severe winter conditions in Europe.

Here in the U.S., the Alaskan Pipeline, which has been closed since Saturday, has reopened but at a reduced rate. U.S. stockpiles fell 1.4 million barrels from, 335.3 million in the week ended January 7. This data was based on 17 analysts polled by Bloomberg News.

Oil recently traded at $91.00 per barrel and many analysts are looking for $100 per barrel. Against that backdrop, global oil companies are ramping up exploration to record levels for 2011.

The Wall Street Journal reports that Barclays (BCS) estimates that spending on new wells, producing platforms and other energy infrastructure will total $490 billion in 2011, an increase of 11%.

Oil rose above $90 per barrel on Wednesday, and the average U.S. price for unleaded regular topped $3 per gallon. Moreover, with the U.S. economic recovery likely to strengthen in 2011, and will strong emerging market GDP growth gobbling up more barrels of oil, both oil and gasoline prices are likely to rise further next year.

That's good news for investors in most oil stocks, but bad news for U.S. consumers, particularly motorists. However, the view from here argues that one should not dabble in the futures market to try to hedge against rising oil prices. The price of oil is influenced by more than 10 variables, and unless you're prepared to lose up to $500 per day, you're probably going to be at a trading disadvantage.

Veteran stock and investment analyst and now Bedford Oak Advisors Chairman Harvey Eisen has weighed-in on the oil/natural gas kabuki dance, with a bullish outlook for natural gas.

Oil, which historically trades at about 8 times the price of natural gas, currently is trading at about 20 times natural gas.

On Tuesday at mid-day, oil traded up 58 cents to $88.37 per barrel, while natural gas was down 1 cent to $4.40 per million British thermal units (MMBtu).

OPEC, which is responsible for 35% of world's oil production, has left output quotas unchanged at 24.85 million barrels a day.

The International Energy Agency (IEA) forecasts worldwide demand at 88.8 million barrels a day for 2011, up from 87.1 million bpd this year.

Oil has rallied 25% this year. OPEC profits are estimated to be higher by 35% to $750 billion. Recent oil prices have hovered between $80 to $90 per barrel.

Investors -- certainly U.S. stock investors -- would be wise to keep one eye on the price of oil, currently pushing $90 per barrel. Oil traded up 10 cents to $89.29 on Monday at mid-day.

And the reason is obvious enough: once again, oil is approaching the danger zone, from a U.S. GDP growth standpoint.

No one knows precisely at what point oil begins to substantially hinder consumer spending and slow commercial activity -- but this much is known: every $1 per barrel rise in oil decreases U.S. GDP by $100 billion per year and every 1 cent increase in gasoline decreases U.S. consumer disposable income by about $600 million per year.

A batch of cold weather is spreading across Europe, pumping up demand for Brent crude. On the ICE exchange, January Brent traded at $90.69 per barrel, up $1.82, the Financial Times reported.

Brent crude -- the benchmark used by Europeans -- contracts are in 'backwardation,' the FT notes. Backwardation happens when the market quotes a lower price for a more distant delivery day. For example, January Brent is 4 cents higher than February and 10 cents higher than March. Backwardation usually means that there is strong immediate demand for the product.

China's rapidly growing economy and its implied increase in energy consumption will be among the most important factors propelling the price of oil higher, says a key energy analysis firm.

What's more, almost half of the net growth in global oil demand through 2035 will come from China, and the Asian giant will be chief among the factors that push the price of crude over $100 per barrel after 2015, permanently, and then and over $200 per barrel by 2035, according to research compiled by the International Energy Agency, dw-world-de reported Tuesday.

The gold market exploded Thursday with the December contract up $45.50 to $1,383.10 per ounce, as reported in the Wall Street Journal.

As usual, there are lots of reasons for the spectacular rise. The two main ones are currency worries and inflation.

Let's take the currency issue first. The December U.S. dollar contract is hovering just above the 75 level. That level held and the dollar then rose to 89.11. Now it has come back down to the 75 level. A breach of 75 would signal a further move down.

Francisco Blanch, global head of commodity research at Bank of America/Merrill Lynch, stated in the Financial Times that his forecast is for oil prices to move above $90 per barrel, then to $100 per barrel.

With more stimulus from the Fed, more dollars will be sloshing around the world. This gives a boost to oil demand and then higher prices. QE2 is scheduled to continue into 2011, which will support oil prices into next year.

Investors whose stock and related plays hinge on the price of commodities would be wise to pay close attention to one, key commodity, oil, which popped up $1.52 Monday to $82.95 per barrel.

Investors should also note the primary factor analysts' cited in oil's rise: word of better-than-expected manufacturing sector growth in October in China.

Further, the above refrain is something U.S. investors should get used to: stronger growth in emerging markets abroad, higher commodity costs here.

One thing OPEC can never be accused of is: being a bastion of economic stimulus.

An OPEC official said some members of the group are calling for a $100 per barrel oil price, due to the dollar's recent weakening. Oil is priced in dollars.

Venezuelan Energy and Oil Minister Rafael Ramirez told Bloomberg News the recent fall in the dollar means the "real price" of oil is $20 less than current levels, justifying a $100 price. Oil closed down $1.43 to $81.26 per barrel Friday.

It's a stock market that's certainly capable of confounding and frustrating stock investors.

Given the above -- a climate in which the outlook for cyclical stocks, if not most stocks -- brightens and darkens like almost daily -- is there a refuge?

Oil might be one. The oil trade is back in vogue. Come to think of it, when was the oil trade ever really out-of-favor? Perhaps during the financial crisis' acute stage from December 2008 to March 2009, when oil briefly plunged to about $35 per barrel.

Oil probed $80 per barrel Thursday, largely on better-than-expected second quarter U.S. GDP growth of 1.7%, and a continued down-trend in U.S. initial jobless claims. Oil closed at $70.85, up $1.99.

Further, oil's recent rise from $70 to $80 demonstrates that crude's price is being driven primarily by investor sentiment, not by the commodity's fundamentals. Inventories are high but investors sense that the growing U.S./global economies will increase demand for oil in the quarters ahead.

After a strong day yesterday for oil prices, the precious crude has had another strong showing today, rising $2.04 a barrel to $79.90, and was trading above the psychological $80 mark earlier in the day.

One of the main catalysts pushing oil prices higher today was a better than expected jobs report from the U.S. Labor Department that showed that first time jobless claims were lower than expected last week.