Oil Prices Slightly Below Record High

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Oil has moving up, up, and away, as investors speculate that Oil production is in jeopardy because of world events. But like any other investment, as prices reach a high, you see some pullback as traders take profits.

The surge was largely driven by news that Mexico’s Petroleos Mexicanos, or Pemex, was to temporarily halt as much as 600,000 barrels of daily crude production, due to stormy weather.

But concern over the disruption of supply from Mexico was easing, analysts said.

“It looks like the production will resume in a matter of days so it’s only a temporary disruption,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Also pushing prices up was the weakening U.S. dollar, which has drawn investors to dollar-denominated crude futures and increased the appeal of oil as an alternative investment, Shum said.

You can’t help wondering if oil prices might be hitting an area of “irrational exuberance”.

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