What prices are doing: Crude oil for February delivery fell 77 cents to $82.41 a barrel. It closed at $83.18 Wednesday, the highest settlement since Oct. 9, 2008.
What's moving prices: The Energy Information Administration reported crude supplies and gasoline stockpiles posted increases Wednesday. Distillates, used to make heating oil and diesel, fell by a modest amount.
Inventories are still above the upper boundary of the average range for this time of year, and investors are reconsidering their concerns that the colder weather could trigger shortages.
Declining inventories and cold temperatures have recently boosted oil. In the 10-day rally, crude prices have surged more than $10, or 15%.
Oil was also pressured by a stronger dollar, which pushed higher against the euro, pound and the yen. Crude oil, like other commodities, is priced in dollars, and a firmer greenback boosts prices.
What analysts are saying: "We are still so far above the high end of normal range of inventories that even a record cold winter will leave us with plenty of heating oil at the end of the season," said energy economist Jim Williams, president of WTRG Economics.
He added that the recent run has also resulted in some investors reaping profits, which pushes prices lower.
Williams expects oil to trade between the $70 and $80 range in the near future.
By Hibah Yousuf, staff reporterJanuary 7, 2010: 7:48 AM ET
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