Has the Great Oil Re-flation Trade Backfired?

While we were sleeping this morning, Asian traders (or western insomniacs) seemed intent on finding out:

Crude Oil Price Rise

No real news snapped crude oil out of its five month trading range of $65-75 a barrel… just the usual global rebound buzz. You can’t even blame the dollar – at 75.5, the dollar index is still lousy, but a few tenths of a point above last week’s 12 month lows.

So we wonder, at what point will this recovery trade start stifling the recovery? $80? $100? Or will gas have to cost $4 a gallon again before anyone notices? And if demand really is rebounding, can the world supply handle it?