October crude oil prices this morning are trading +58 cents a barrel and October gasoline is trading +2.09 cents a gallon. The main bullish factor is Hurricane Ike which is still fairly far out in the Atlantic but may have a chance of hitting the Gulf of Mexico. Tropical Storm Hanna is currently near the Bahamas and is expected to make landfall in North or South Carolina by Saturday. October crude oil prices yesterday continued Tuesday's decline and closed -$0.36 a barrel although October gasoline closed +3.31 cents a gallon. Bearish factors for crude oil prices yesterday included

(1) the collapse of Ospraie Management's largest hedge fund due to bad bets on commodity stocks, which caused concern about position liquidation, (

2) the continued rally in the dollar index to a 10-3/4 month high,

(3) the 1.6% drop in US gasoline demand for the 19th consecutive week last week, according to MasterCard, and

(4) the prediction by OPEC President Khelil that oil prices will continue to drop as the dollar strengthens.(Duh????)

Bullish factors for crude oil prices yesterday included

(1) the prediction by Goldman Sachs that crude oil will rise to $149 a barrel by year-end due to robust emerging market oil demand growth against a backdrop of continuing non-OPEC supply disruptions. and

(2) the continued threat of hurricane damage as hurricane season is in full swing with the possible upgrading of several tropical storms in the Atlantic to hurricanes within the next week. Expectations for today's DOE inventory report are for a +450,000 bbl climb in crude oil inventories, a -1.3 million bbl decline in gasoline stockpiles, a +1.0 million bbl increase in distillate inventories and a +0.2 increase in the refinery capacity rate to 87.5%.