Why Oil Prices Aren't Falling

Traders blamed the bitter dispute at Russian oil giant Yukos for propelling crude prices to record levels last week. But what's less clear is how a company that produces just 2% of the earth's oil supply can trigger a worldwide hike in the price of September crude, which reached $44.60 a barrel on Friday.

The answer lies as much in psychology as in economics. "There's not a lot of logic to the move that oil has had," says Jeff Kleintop, chief investment strategist at PNC Advisors, noting that a tepid U.S. jobs report last Friday raises the specter of a decelerating...

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