Crude oil prices cruised to their highest level of 2010 Wednesday (March 10) morning, before quickly reversing, as speculators consider new data on the level of crude supplies released by the Energy Information Administration.

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.

Many analysts quickly pointed out that despite the smaller than expected inventory, on the whole, crude levels are still extremely high for the current oil price point. Speculators apparently agreed as after the immediate run up to $82, oil prices pulled back in the later morning of New York trade to draw near Tuesday’s settle price near $81.50.

OPEC, the collection of the world’s largest oil producing and exporting countries, believes a more stable global economy for the rest of the year should lead to an increase in demand of over 900,000 barrels of crude oil a day.

OPEC would prefer that oil prices remain at current levels, or go even higher. However, real data continues to suggest modest demand in oil-based products in the US. Business and consumers are still hesitant to begin traveling and transporting at pre-recession levels. Without significant gains in US oil demand, it is hard to imagine OPEC’s forecast would 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 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.