If you've been following oil prices lately, perhaps you noticed the constant up/down change in oil prices. Sometimes you'll see a losing streak like the Washington Nationals have seen... several days of losing. On the other hand, we've also seen winning streaks like the BoSox are enjoying- several days. Either way, there's no good way to describe the unpredictability going on with oil prices lately.

We saw a large drop in oil supplies last week which has temporarily pushed prices higher. On the flip side of the coin, even after last week's decline in stocks, oil stocks remain nearly 10% higher than a year ago. All this while we're heading into a time of year that sees declining use. Oil prices are stuck in a rut between $65 and $75 and any breakout of that range may bring instability to prices.

OPEC has now given a "thumbs up" to that price range, saying it's good for producers and consumers. That may be true, but don't expect OPEC to open the spigot wider until prices approach $100 in the future. The slower OPEC is to raise production, the faster oil prices will climb.

Some good news is that Russia's production has risen above expectations. Production there is approaching 10 million barrels a day! Russia has taken advantage of OPEC's supply cuts by raising production and filling in the gap.

With world economies starting to recover, we can expect oil prices to break out of the $65-$75 range in early 2010. Since I have no positions in oil, you can call my prediction "unbiased". While I realize consumers enjoy cheaper oil, the threat from developing Asian countries can not go unnoticed. China is selling nearly 800,000 vehicles per month while numbers from India weren't immediately available. If North America wants cheaper oil for some time, demand must be reduced. If people would stop driving their oil thirsty vehicles, oil demand and prices would be lower. There's no question.

What do you think? Leave a comment or suggestion for a future blog post!