Oil has traded as high as $84.44 today after hitting a 17-month high on March 31st. Light sweet crude has been trading between 70 and 83 most of the time since June 2009. A move above 83 is a significant break out.

Oil is acting bullish because of seasonal factors, but may have been kept down recently because of problems with the weekly data that the EIA (Energy Information Agency) publishes every Wednesday at 10:30AM New York time. The price of oil can move sharply up or down based on this information. Unfortunately, the numbers in the inventory reports are not reliable.

An article in the March 18th edition of the Wall Street Journal entitled "DOE Documents Cite Outdated Methodology, Errors in EIA's Weekly Survey" revealed why the weekly oil data could not be trusted. The Journal stated that the process utilized by the EIA to determine inventory levels hadn't kept up with important changes over the years. It went on to mention a litany of problems with data collection at the EIA including old technology and out-of-date methodology. It specifically cited an inaccurate report in September that caused an unjustified big move up in oil prices.

The oil report yesterday indicated that crude oil inventories went up by 2.9 million barrels last week and gasoline inventories were up 300,000 barrels. U.S. crude oil inventories and gasoline were above the upper limit of the average range for this time of year according to the EIA. While these numbers don't look good, who knows whether or not they are even close to the actual ones.

Problems with the EIA notwithstanding, the price of oil is determined globally, not just by what happens in the U.S. Crude oil is entering a seasonally strong period that might last until the September. The summer driving season in the northern hemisphere has yet to begin and this is when demand for oil is highest. A price breakout at this point can have sustaining power.

ETFs/ETNs that investors can use to go long on oil include (NYSEArca: OIL), (NYSEArca: DBO), (NYSEArca: USO) and (NYSEArca: USL). More aggressive investors can purchase the ProShares Ultra DJ-UBS Crude Oil Trust (NYSEArca: UCO) which attempts to double the daily performance of crude oil.

Disclosure: Long oil