Oil prices cool off as storm worries fizzle out

We also have to pay attention to the upcoming winter heating months. Demand for heating oil will depend on just how harshly the winter hits across the country. Analysts are still pretty divided at this time on the question of supply in the next few months, so a lot will be determined by mother nature as to the level of demand we see through the end of the year.

A final factor that is once again out of our control to predict is the possibility for geo-political tensions hampering production output. As we discussed last week, there is constantly the real possibility that we could see an event like last year's Israel / Hezbollah conflict break out at any time. There is currently tension in Nigeria, concerns brewing over Iran, and the ever present instability in Iraq.

For now prices have continued to stay above the $80 mark, with futures trading down 69 cents to $80.93. I would expect the market to hover right around the $80 mark for tomorrow as well in anticipation of Wednesday's inventory report from the Department of Energy, which the market will probably use to decide which direction oil will be headed for the upcoming week.

[Thanks to gsloan for the photo]

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer