Oil Futures Extend Gains

Updated from 2:58 p.m. EST

Energy prices had a back-and-forth session Wednesday, but in the end crude futures surged to extend the prior day's big rally.

The front-month contract for light, sweet crude added $1.17 to close at $58.14 a barrel on the Nymex, while heating oil was up a penny at $1.65 a gallon.

Natural gas was down 7 cents at $7.67 per million British thermal units, and gasoline shed 2 cents to $1.50 a gallon.

Inventories of crude oil grew to 325 million barrels at the end of last week, compared with 322 million a week before, the Energy Information Administration stated in its Weekly Petroleum Status Report. Stockpiles of gasoline were higher by nearly 4 million barrels at 225 million.

Although rising crude stores and climbing oil prices seem perplexing, they do give a revealing insight into market sentiment.

"This is what we call a 'behavioral tell,'" says Woody Dorsey, a behavioral market strategist at Market Semiotics in Vermont. He notes that when bearish news, such as the inventory report, hits the market, the bulls are immediately jumping in and bidding the price back up.

There is a "bullish predisposition," he says. "Oil is going a lot higher than anyone thinks."

Not everyone is so sanguine about the bull trend, with at least one observer seeing softer prices to come.