Oil prices are hovering just below $80 per barrel, at around $79 for September crude delivery in Tuesday’s (July 27) early New York Mercantile Exchange trade. Still moving in sync with equities in the big picture, the price of oil is limited by continued reports of sluggish crude demand levels in the US.

How long oil speculation lines up with equity direction remains to be seen. If reports on US crude inventory levels continue to show less demand than expected by analysts, it is quite possible stocks could carry higher and leave oil prices at or below current levels in the market.

Late Tuesday the American Petroleum Institute will share its report on last week’s crude inventories, with the Energy Information Administration set to follow with its weekly update on Wednesday.

For several weeks, actual inventory level reports have either showed higher levels of crude supplies, or levels have dropped by less than analysts had predicted. This can be attributed to ongoing budgeting on travel amongst consumers and tight cost controls by businesses.

The popular word during the recession “staycation”, has entered the marketing fray again as families are trying to find cheap ways to vacation. Rather than planning expensive trips and travels, more Americans are finding rest and relaxation closer to home.

The good news for consumers that are driving, oil prices have been fairly stable for much of the normally busy summer driving season. Prices at many pumps around the country are near or below the levels they were in the late spring and early weeks of summer.

Many top analysts continue to suggest that fundamental conditions support lower oil prices going forward. However, if the dollar remains weak and inventory levels show surprising drops, oil prices could certainly creep higher into the $85-90 range.