Oiled Up, Dollar Down

With the dollar continuing to deteriorate, oil is on the rise, spelling big trouble for the economy.

Oil prices rose more than $2 to above $77 a barrel on Thursday after the Energy Information Administration (EIA) announced that crude supplies rose a less-than-expected 400,000 barrels, while gasoline inventories dropped 5.2 million barrels.

These gains added to an earlier rise, as the euro fell on disappointing Q3 earnings reports, traders said

U.S. light, sweet crude for November delivery hit its highest level since October 2008 at above $77.

London Brent crude was up.

"At this stage the market is dominated by nothing commodity-driven — just the weaker dollar and earnings season," said CMC Markets analyst James Hughes.

We're already seeing evidence now that the flight from the dollar into commodities like oil is underway. Triple digit oil this winter would mean brutal prices this summer. It's looking like another oil bubble is forming. Oil has been floating between $60 and $75 a barrel since May or so, but the break upwards today to $77.50 is a major indicator that the move is on.

On top of all the other financial problems your average American is facing these days, let's throw in $4 a gallon gas again, eh?