Oil prices are on an uptrend, with the basis light sweet crude on the NYMEX surpassing its recent contract peak in late July. The high oil prices are a real concern because of its negative impact on transportation companies where oil is a major part of their expenses. For the economy, the high oil prices translate into higher corporate costs and could impact earnings. For the consumer, high oil prices translate into high gasoline prices. People will tend to drive less and make fewer trips to the malls, which in turn impacts retail sales and the economy.

 The near-term technical picture for the October oil is bullish at this time with relatively strong Relative Strength, but the buying has also created an overbought condition on the chart, an indication of potential near-term selling pressure. The October oil is trading above its 20-day and 50-day moving averages of $73.10 and $73.56, respectively, as well as the 200-day moving average at $67.83. The upside target is a pivot point at $78.80 and the 14-day 80% RSI at $83.04.

 Watch for some movement as the 12-country Organization of Petroleum Exporting Countries (OPEC) is currently in a gathering to decide to maintain the production level or perhaps increase production to help alleviate some of the high prices. It is speculated that the official output target may be raised by an additional 500,000 to 700,000 barrels a day to add to the current 25.8 million barrels a day

 But despite what OPEC does, it may be less of an effect as there may be a global demand issue that could exceed supply by year- end. Then, of course, an economic slowdown worldwide could lessen demand for oil and this could pressure oil prices. OPEC will need to consider this possibility as it decides what to do.