Oil futures close at highest levels since October 2008

As the rapid rebound in air cargo traffic moderates, prognosticators forecast steady growth going forward, always with the caveat, UNLESS the air cargo industry or world economy is disturbed by a shock. Well, following on the heels of worries of new government security requirements as a consequence of last month’s intercepted terrorist bombs from Yemen, we add the specter of a return of the high oil prices that exacerbated industry losses in the “Great Recession”.

Today, crude oil for December 2010 delivery closed up 1.3% at $88.04 per barrel. Usually such swings can be attributed to variation in the value of the US Dollar, but the dollar has actually gained value of late as global investors “retreat to safety”. This time traders were reacting to a surprise drop in oil stockpiles reported by the US Energy Information Administration (DOE EIA). Analysts had expected an increase in crude inventories based on continuing lackluster growth of the US economy.

Hopefully commodities markets will calm and oil prices will fall back from today’s spike.