Today, worries with regard to the budget deficit woes continue all over Europe. The news releases today from the U.K. and the Euro zone are showing that the agony is continuing as the deficit widened.

Crude prices are likely to hold above $80 a barrel in the near term if Wednesday’s inventory data shows continued improvements in U.S. energy demand, said analysts at Credit Suisse in a note to clients.

Crude oil is trading around $80 a barrel after rising anticipations that Greece’s budget problems will be solved out and as an industry report showed a decline in distillate supplies in the U.S.

Crude-oil futures finished with a gain of 2.5% on Tuesday, receiving a boost from news that Germany is mulling a plan to rescue Greece, a report that pressured the dollar and lifted prices for commodities.

Crude oil futures finished on a 1% gain today - Monday, helped by soothed nerves about the debt situation of several European countries, even as concerns about weak demand persisted.

Crude oil futures finished 2% higher on Monday, after dropping last week and for the month of January, as upbeat global manufacturing reports and cold temperatures in the U.S. lifted demand prospects. Also, upbeat manufacturing surveys from China, Europe and the U.S. gave a lift to commodities.

Crude oil rose for a second day hitting 74.84 as Iran successfully tested a medium-range missile. Oil extended earlier gains after the Obama administration said Iran’s test of the upgraded missile undermines the country’s claim of peaceful intentions.

Crude futures started to fall again yesterday leaving their earlier gains after the crude oil inventories showed a surprising buildup and bet expectations reaching 2.1 M while the estimates where -0.4 M and last week’s release was 1.0 M. Also, oil continued its drop on Thursday, due to increasing doubts on the economic recovery and as the dollar rebounded.

Today the International Energy Agency (IEA) said world energy demand is projected to rise by 40% between now and 2030, reaching 16.8 billion tons of oil equivalents. Oil demand is expected to grow by 1% per year on average over the projection period, from 85 million barrels per day in 2008 to 105 million barrels a day in 2030.

Crude for November delivery traded as high as $80.05 a barrel -hitting a fresh one-year high- in trading Tuesday afternoon in Tokyo, though it later retreated slightly to $79.93, still up 32 cents.
The gains were helped by recent strong economic data bringing money in from the sidelines also buoyed prices. We would attribute most of this rally to this inflow of liquidity into the market.