Oil prices continued their stratospheric climb on Thursday, Oct. 18, topping $89 per barrel and leading some analysts to speculate that the market may have moved beyond simple supply and demand.
For most of the week, analysts had blamed the rise on decreased supplies and growing concerns over a possible attack by Turkey on Kurdish rebels in northern Iraq. By Thursday, however, some analysts were speculating that something else might be going on.
The U.S. Department of Energy’s weekly report showed unexpectedly large gains in both gasoline and crude oil inventories. The Associated Press reported that many analysts are now saying that speculative investing is the real culprit behind the dramatic increases this week.
The analysts also say that supply and demand fundamentals do not support prices near $90 a barrel.
Light, sweet crude hit a new intraday high of $89 a barrel in trading on Wednesday, Oct. 17, on the New York Mercantile Exchange. By Thursday morning it had slipped back down to $87.92 a barrel.