Rally in Oil Prices May be Running out of Steam - 6/18/09

Oil has doubled since the beginning of the year.  Many experts see oil prices having been stretched too much based on current fundamentals.  A move back to the low $60s would be a healthy correction.

Oil stocks have doubled from their recent lows.  Gasoline prices have tracked the prices of oil as well.

With millions out of work they are driving less and gasoline inventories are high while demand is soft.  Refiners are running at only 86% capacity which is low for this time of year.

The recent run up in crude oil has been driven by weakness in the dollar and not demand.

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