U.S. stockpiles of crude oil rose 2.93 million barrels to 354.2 million last week, leaving supplies 6.5 percent above the five-year average for the period, according to an Energy Department report yesterday. Inventories were forecast to climb by 2.5 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.

"These numbers are bearish relative to expectations," said Tim Evans, an energy analyst at Citi Futures Perspective in New York. "This is a reminder that there is no physical tightness in crude oil. Supplies are at the highest level since June 12, 2009, which is quite a while back."

Total fuel consumption declined 1.6 percent to 19 million barrels a day last week, yesterday's report showed. The crude oil contract for May delivery has increased $3.76, or 4.7 percent, to $83.76 a barrel so far this week on the New York Mercantile Exchange. Yesterday's settlement price was the highest since Oct. 9, 2008. Futures were up 5.5 percent last quarter and are 69 percent higher than a year ago.

The oil survey has correctly predicted the direction of futures 48 percent of the time since its start in April 2004.

Eoin Treacy's view Crude oil hit $85 for the first time since October 2008 today and joins a growing number of stock market indices moving to new recovery highs. The reason I mention stock market indices in the context of oil is because they share relatively similar chart patterns and are responding to a pick up in the pace of global economic recovery; particularly better manufacturing figures.

While the oil market continues to trade in contango, the spread has tightened up considerably; reducing the positive carry on a short position. At the end of 2008, reports were widespread of fully laden oil tankers sitting at anchor, as traders waited for prices to pick up. Shipping rates had collapsed which made this possible but are up nearly 500% since December 2008, oil has rallied impressively and the chart action suggests that the market has returned to demand dominance.

Oil has sustained a progression of incrementally higher reaction lows since December 2008 and these would need to be taken out to question potential for further higher to lateral ranging. Gasoline continues to lead to the upside and has been consolidating above the January high. It broke upwards again today and a downward dynamic would be required to question scope for further upside. Heating oil is performing more in line with oil.