But Tim Evans, an analyst at Citigroup Inc, said that there was no fundamental reason for oil prices to be moving higher.
Even if refinery utilization spiked much higher, there is plenty of crude on hand to feed the refining process, Evans said.
If, on the other hand, an argument that gasoline futures were pulling oil prices higher was valid, then gas futures would be setting records, he argued.
"[But] we've not made a new high in spot gasoline prices since early May," Evans said. "Let's not torture ourselves by trying to come up with a fundamental rationale."
So, what is going on?
"You're in territory where, I think, you're operating a little bit under the `bigger fool' theory," Evans said.
In other words, people buying oil for more than US$70 a barrel are just playing a speculative game, seeing, perhaps, if they can't find someone -- a "bigger fool" -- willing to pay US$71, Evans said.
RSS