Oil

Oil Above $70 a Barrel, Despite High-Level Inventories

Oil recently hit a new high year record of closing just over $70 a barrel Monday afternoon although recent inventory levels suggest that the U.S. oil reserves are at a 8 year high. As investment flows into oil continue to apply pressure on the supply and demand aspect of oil the price keeps increasing because of present factors for an oil bull market.

The pure speculation of current economic and global issues seems to also be applying pressure to the price of oil. With the possibility of the Iran nuke crises in the future outlook and one of the most intense hurricane seasons looking quite possible the price of oil may just starting its steep incline. At $70 a barrel, if it's sustained, will continue to drag consumer spending, which is already coping with the FED's steady increasing of higher interest rates and a cooling housing market. Higher oil prices also may apply upward pressure on inflation, but for the short term it is unlikely.

Many consumers and analysts are unclear if oil will continue to raise and dampen the outlook for the U.S. economy. The one portion that is clear is that oil has a heavy impact on the growth of the economy and consumer spending. With gas near a 10 year high it could take some time for consumers to get used to the frequent gas rate hikes. But ultimately, we must invest in acquiring a new energy source and the United States must cut its addiction to Oil.