Even OPEC Confused By Oil Spike

Just like there’s a run up in the equity market, the price in oil is also running higher, edging ever closer to $60 a barrel. And just like the equity market, the underlying data doesn’t really square with the spike in prices.

For example, yesterday the market took off after learning that 491,000 jobs were lost, and most banks will need billions of dollars after failing the stress tests.

Today, the price of a barrel for June delivery ran above $58. It’s rising even though the economy isn’t really recovering, and the U.S. has 375.3 million barrels in oil supplies, the most since 1990.

This is incongruous behaviour is starting to rattle OPEC, apparently.  Qatar’s Oil Minister told Dow Jones that “we want to be sure that what we are now seeing with increased oil prices is due to increased demand not just speculation.” OPEC meets at the end of the month, and says it’s too early to know if will change its oil supply quotas.

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