Oil Alert: Crude Finishes the Week on a High

NEW YORK (TheStreet) -- It was another big day for oil, as futures continued rallying past the $78 mark today.

During Friday action on the New York Mercantile Exchange, front-month crude traded higher by 95 cents to settle at $78.53 per barrel, its highest mark since last October. That came on the heels of yesterday's spirited rally, which saw the November delivery contract add $2.40, and which itself followed news of an unexpectedly deep draw in gasoline stockpiles.

Still, as oil futures tick near $80, here's a buzzword you'll likely see in the coming days: "pullback." With underlying fundamentals continuing to show a sea of oil in storage left because of sluggish demand, many will be left wondering just when that day of price-reckoning will come.

"Today showed this rally still had some strength," Tradition Energy analyst Gene McGillian said. "It's pretty much the same scenario that's played out over the last six months, a rally based on the idea that economic recovery is going to tick up oil demand."

"We'll see a correction," he added. "Whether it comes on Monday or when it goes above $80 is yet to be seen."

The move up came despite a strengthening dollar and a slumping Wall Street. Equity investors weren't feeling too heartened after earnings reports from Bank of America(BAC Quote) and General Electric(GE Quote) tamped down the indexes. Not helping matters were dreary consumer confidence figures that showed weakening in the most recent month.

Still, oil investors appeared to sift for their economic recovery clues and found a gem in a manufacturing report from the Federal Reserve. On Friday, the central bank said industrial production bested forecasts and grew by 0.7% in September. Outputs also jumped by a 5.2% annual rate, their first quarterly increase since the first quarter of 2008.