An Inventory report on the level of crude supplies was released by the Energy Information Administration this morning and pushed Crude oil prices to a brief new high for 2010. The Oil price then reversed the rise during the day.

The price of a barrel of crude for April delivery reached as high as $83.03 early Wednesday morning as speculators applauded the new data that showed a 1.4 million barrel increase in crude last week for a 343 million barrel total inventory level.

According to the Platts survey of analysts, the expectation had been for 2.1 million barrels. The much lower than anticipated level of inventory triggered an immediate upward reaction in trade as investors saw the lower than expected number as a sign of increased demand.

Analysts pointed out that despite the lower than expected inventory number, crude oil levels are still high for the current oil price. Traders seemingly agreed as after the running up to $82, oil prices dropped back in the later morning of the session to close near Tuesday’s price of $81.50.

OPEC, an amalgamation of the world’s largest oil producing and exporting nations, says a stable global economy for the remainder of the year should see an increase in demand of over 900,000 barrels of crude oil per day.

OPEC would prefer oil prices to remain at todays levels, or to go even higher. However, data continues to suggest modest demand in oil products in the US. Business and consumers are still reluctant to begin transporting at pre-recession levels. Without increased gains in US oil demand, it is hard to imagine OPEC’s forecast can hold true.

Several leading analysts have continued to call current price levels, which are 17 per cent greater over the last month, too high based on simple supply and demand economics. Inventory levels continue to remain near historic highs and OPEC has not opted to intervene greatly by significantly cutting its production to synthetically drive oil prices higher.

Still a major catalyst for the current firmness in oil prices appears to be its correlation with US stocks and the general sentiment of economic recovery in progress. Investors appear confident that at some point, the improved economy will shine through and generate more oil consumption by business and consumers.

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