Norway, Nigerian unrest push oil prices higher

Oil prices keep testing our pocketbooks. Whether $50 a barrel oil was sustainable is no longer a question. Now, we're pushing $60, and we have Norway and Nigeria to blame:

This year's high prices haven't curbed growing demand. China, India and the United States continue to burn as much as oil as they can get. Most of the world's oil-rich nations are pumping close to capacity, although the Organization of the Petroleum Exporting Countries has promised to produce more.

...Some of the rise can be blamed on speculative investors, who have poured money into oil trading this year. But global events also played a role, especially in the past week.

-- Embassy closure in Nigeria. Recurring violence in Nigeria often triggers price spikes for crude. After the United States closed its embassy in Lagos on Thursday because of a threat from Islamic militants, oil's price jumped nearly $2. The embassy reopened Monday, but the incident heightened fears about terrorist strikes in oil-producing nations.

-- Labor unrest in Norway. Politicians who fret about oil supplies coming from unstable countries usually don't mean Norway. But a Norwegian labor union has threatened a strike that could block 900,000 barrels each day coming from the country's offshore oil fields.

-- OPEC moves. OPEC vowed last week to increase production, adding Monday that it would try to pump an additional 500,000 barrels per day. But analysts say that most OPEC members already produce as much oil as they can, rendering the promise moot.

Still, some oil industry analysts consider the prices overblown. Although supplies remain tight, they are adequate, these analysts insist. And the high prices eventually will cut into demand.

Will they cut into demand? Really? Or will the need for oil displace other uses for peoples' disposable incomes?