Oil Prices

By Spencer,

What is causing the rise in oil prices?

Part of it is that $30 oil in December was most likely too low, and as the world economy and oil demand bottomed, oil prices should have also bottomed.

OK, that should explain oil in the $30 -$50 range. I expected to see oil bounce between $30 and $50 in a cob-web function as oil settled in on a new equilibrium price.

That analysis worked for a while, but now Oil has broken out to the upside. Why?

Maybe marginal demand is stronger than generally thought.

For years I have watched real oil imports as a measure of US marginal demand for oil and US demand for OPEC oil. Early this year, after several years of stagnation real oil imports surged very strongly. That was a real surprise. With oil demand falling and oil stocks unusually high, why should oil imports surge? It does not make sense to me.

Do others have a good explanation?