Black gold, Texas tea. Gold might be shinny, but oil can get the job done. Without gold, the world suffers little; without oil, the world comes to a stand still.

The climb in Oil prices reflex a lot traders knowledge of Peak oil theory, that the cheap oil is running out. They know that marginal production costs are higher than $40 a barrel for most the of new sources of oil, such deep water wells off Brazil and Canadian oil sands. None OPEC production is in decline, steep decline in the case of North Sea and Mexico. The age of average oil worker is 49 and therefore be a growing shortage in the future and there just not enough project coming on stream in next 10 years to replace the declines of the now old super giant fields like Canterell that make up a large proportion of the production. So its not matter if oil prices rise but when and everyone wants to get in at the bottom, to make a killing on the next oil price spike. With the hurricane season coming up and decline in Mexican and Russia exports those 375.3 million barrels will not last long and there some evidence that demand destruction is slowing. By the time it becomes clear demand is rising then it could too be late jump on the bandwagon, so $50 a good price when we have already seen prices can spike to almost $150.