Oil: How high can it go?

Today in history, crude oil touched $60/barrel, after Federal Reserve Chairman Alan Greenspan warned against starting a trade war with China, advice that would ensure continued strong demand for crude. Momentum in the oil market has sent futures rallying to record highs in the past week, fuelled by embassy closings in OPEC member Nigeria. Oil prices have shot up 58 per cent in the last year amid fears supplies are outpacing global demand. Futures eased 95 cents on Wednesday after the U.S. Energy Department said crude oil inventories fell by 1.58 million barrels to 327.4 million in the week ended June 17. Analysts were expecting a drop of 2 million barrels. Supplies remain well above the upper end of the average range for this time of year.