Logic says that a surprise increase or a narrower-than-expected contraction of crude supplies may lead to some relief in the commodity pits. That isn't the case. Even though the Energy Department posted a narrower-than-expected loss of 800,000 barrels of crude during the past week, black gold is nearly a dollar higher at $97.55 per barrel. Analysts had expected an inventory drop in the 1-million-barrel range. Gasoline inventories matched crude's drop of 800,000 barrels, while distillates increased by 100,000 barrels. Gas inventories are at the bottom end of their average range, while distillates are at the upper end.

Is there hope for cheaper crude prices in the future? Fed Governor Frederic Mishkin believes so. He said earlier today that signs from the oil futures market indicate that high oil prices will begin to retreat. Mishkin told the House Small Business Committee that the economy has remained very resilient despite the rising price of crude. Mishkin noted that oil's impact on business is much smaller than 20 years ago and that swings in oil prices are outside the Fed's control. What the Fed can control is making sure that the temporary impact of oil's recent spike on inflation doesn't become a long-term problem.