Oil rose over $81/barrel - highest for the year. US supplies declined more than forecast. Dollar dropped.

analyst forecasts, in the week ended Oct. 16, according to the report.

“As long as there’s pressure on the U.S. dollar, there will be upward movement in oil,” said Rachel Ziemba, an analyst at RGE Monitor, an economic research company in New York. “We could see even greater climbs higher, which will put us even further out of whack from the fundamentals.”

Stocks, ExxonMobil and Chevron, are up big time.

Is oil the new hedging tool?

Energy Sec. Steven Chu was/is not a big fan of using gov. money for “clean vehicles” (he actually almost mocked their potential), and zeroed their funding.

In slashing the budget, Chu, an advocate of alternative energy, reopened longstanding questions over whether hydrogen cars are a distant pipe dream, or as former President Bush once said, a technology that could be in showrooms by 2019.

Never fear, the Senate is here. On Thurs. the Senate agreed to restore all the money for hydrogen car research that was previously cut. The hydrogen people are happy, carmakers are happy.

We’re grateful to the Congress for seeing the value in continuing this work,” said Jerome Hinkle, vice president of government affairs for the National Hydrogen Association. He added that the administration has since seemed to moderate its opposition to hydrogen cars.

“They’ve made peace with it,” he said.

We shall see.

Energy prices rose Monday - Oil settling over $73/barrel.

Heating Oil and Natural Gas took a jump, too. Supplies of all three are more than plentiful, so what can be blamed but the weak dollar. UGH!

Some think they certainly should. Fuel inventories should climb and consumption is down.

Gas stockpiles increased by 2.94 million barrels last week. Speculators, look out for the downside!

Demand dropped .9% last week.

Despite this oil prices up, equities up, dollar down.

Crude oil for November delivery rose $1.74, or 2.5 percent, to $71.69 a barrel so far this week on the New York Mercantile Exchange, the highest close since Sept. 18. Futures are up 61 percent this year.

No surprise here. Pickens sees the oil supply very tight once the recovery gets underway, especially since the Chinese have spent some $200 billion buying up oil supplies around the world.

Changing to natural gas is the ticket (and fits right in with Pickens Clean Energy Fuels Corp.)

Pickens guess for oil 2010? $85/barrel. Might see $100 by year end.