Crude prices bounced above $80 per barrel once again today, a level that even OPEC leaders have said is too high given the fragile state of the global economy.
And again it is the U.S. currency that is getting most of the blame.
The dollar gave up more ground against the euro early today, sending prices above the psychologically important $80 level early.
Benchmark crude for December delivery added 87 cents to $80.47 a barrel on the New York Mercantile Exchange. In London, Brent crude for December delivery rose 87 cents to $78.98 on the ICE Futures exchange.
In other Nymex trading, heating oil rose 1.5 cents to $2.0886 a gallon. Gasoline for December delivery rose less than a penny to $2.0073 a gallon. Natural gas for December fell 12.5 cents to $4.797 per 1,000 cubic feet.
The Energy Information Administration then reported that oil and gasoline supplies dropped, a surprise to most energy analysts who believed that the amount of unused crude in storage would grow.
Prices jumped immediately, yet that same report contained the same issues that have raised questions about why energy prices are rising right now.
The demand for gasoline in the United States is flat compared with last year. That does not signal a healthy economy or demand for energy.
Gas prices hit a new high for the year last week and the national average price for a gallon on Wednesday was around $2.68. That is 22.3 cents more expensive than last month, according to auto club AAA, Wright Express and Oil Price Information Service.
Gas prices are following the price of crude, not because refiners are turning a lot of it into fuel, but because a damaged dollar has made it comparatively cheap to buy.
Crude is bought and sold in dollars, so if you are holding euros or another strong currency, you can get more crude for less.
Today, the EIA said refiners cut operations even further, and every day last week they bought 233,000 fewer barrels of oil each day than the did last year. (AP)
