Oil Prices and Inventories

With oil again over $90 a barrel, the question arises whether we are likely to see another spike in prices comparable to what occurred in the summer of 2008, when oil reached $145 a barrel.

The following three charts, from the Energy Information Administration's Short Term Energy Outlook in January 2011, suggest the answer is "no."

OECD commercial oil stocks are considerably higher than in the lean years preceding the 2008 spike in prices:

The same is true for US oil inventories

Since the marginal demand for oil is now coming from emerging markets like China and India, both of the above charts are not necessarily determinative. But also bearing on the question is the state of surplus capacity in OPEC producers. According to the EIA, it's much higher than in the 2004-2008 period.