Oil prices hit a 6 week high today, as cold weather gripped most of the country.

Over the weekend the nation was hit with a cold front that reminded oil traders that the high demand winter season is on its way, and could help reduce a lot of the oversupply that the market is currently looking at.

They say you should buy low and sell high, which is easy to say but hard to do. How low is low and how high is high?

Sometimes technical support and resistance levels can be helpful in finding those highs and lows. Right now oil stocks like Exxon Mobil Corp. (NYSE: XOM), PetroChina Company Ltd. (NYSE: PTR) and Chevron Corp. (NYSE: CVX) are just bouncing off support that may be the "low" many traders are looking for.

The past two weeks we have seen oil prices steadily trade higher, but the sellers came out today in reaction to rising concern over consumer confidence and pushed prices lower.

Oil dropped under $67 a barrel today as Wall Street learned that consumer confidence had dropped for the second straight month in July. A major reason for low consumer confidence can be attributed to rapidly rising unemployment in the country.

Why is OPEC expecting a sharp drop in oil prices? First, much of the rise in oil prices has followed the rally on Wall Street. Investors reasoned that higher stock prices means that business is doing better and hence a need for more oil, and prices rise.

Not so fast. Business demand for oil is weak, and the consumer got clobbered by the recession and is holding back spending money. So the classic relationship between the stock market and oil that investors follow is not there this year.

What is the current supply/demand for oil going forward? OPEC is saying that it will take five years to bring demand back to pre-recession levels.

In 2008 average consumption of OPEC oil reached 31 million barrels per day. We will not reach that mark until 2013. Demand for non OPEC oil is expected to remain flat at about 45 million barrels per day.

So now with less demand, there is less desire to invest in new capacity. OPEC had previously planned to spend $165 billion dollars in new capacity. Now they have scaled back these numbers to $110 to $120 billion into the year 2013.

In Rome last May, the International Energy Agency feared that lower investments in capacity would lead to severe future shortages.

Why did China raise its gasoline and diesel prices? Beijing has a pricing policy that uses a 22-day moving average of crude oil. With the price of crude oil trading at around $71 per barrel, China felt it necessary to raise the price of gasoline and diesel fuel 9% and 10%, respectively. This will raise the price of a gallon of gasoline to $3.00 per gallon, compared with the U.S. price of $2.66 a week ago, according to Reuters news service.

With economies around the world gaining ground this quarter, it follows that demand for crude oil is also increasing. So far we've seen a doubling of oil prices since last February. The main concern is, given the pace of recovery, is there a point where demand for crude oil and gasoline will taper off. If so, we may be looking at an intermediate top in oil prices. However, if world economies continue to improve, crude oil could move to $75 to $80 per barrel.

Oil moved up above $70 early in the session, but was unable to hold that momentum through the day. After its strong start to the day, prices dropped $2.19 to $67.83.

A major reason for the drop in prices can be attributed to the World Bank. The World Bank slashed its forecast for this year's global economic growth, and reported that the current recession is deepening.

Earlier this week we were looking at oil prices, and wondering if we would see the precious crude break through the psychological $70 barrier, and that is exactly what we saw today.

For the first time since last November, oil prices were briefly above $70 today, moving up as high as $70.32 before profit taking pushed oil prices down on the day. We finished up the week at $68.44, down 37 cents.

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.