Oil closes above $86

What's weird is that prices keep going up despite signs that the U.S. economy has been slipping. That's not supposed to happen. Then again, oil isn't supposed to reach record levels without any apparent impact on the economy. Today's close was $86.13 a barrel, which is the highest nominal level since they began trading oil contracts in 1983. But keep in mind that when adjusted for inflation, oil is still below all-time highs. For now. Thing is, there's not much to prevent the numbers from going up further. From the NYT:

Despite questions over the direction of the American economy, oil traders have ignored the risks weighing on energy markets. Instead, traders have focused on the same factors that have driven up prices in recent years: global energy demand that keeps defying expectations, tight oil supplies and an energy system that has little spare capacity to cushion sudden shortages. The latest surge for oil prices came after Turkey threatened to invade northern Iraq this weekend to chase rebel Kurdish fighters from the Kurdistan Workers’ Party. The military tensions on the Turkish border adds a new flash point in a volatile region that holds the bulk of the world’s oil reserves. Iraq is the third-largest holder of known reserves, after Saudi Arabia and Iran.

The government's latest survey just out this afternoon shows that in L.A. the average price of regular is $3.024, up from $2.987 the week before.