If we happen to see more huge declines in inventory this Wednesday when we get the new inventory report, the market could definitely move into a frenzy and drive prices up to $100. Let's remember last week when analysts had expected a 300,000 barrel increase and actually got a 5.3 million barrel decline. That's a pretty big miss. If they miss by that amount again this week, prices will continue to charge higher.

Last week's inventory report, although shockingly worse than analysts had expected, can not be pointed to solely as the reason for this recent run-up in prices. There are several areas of concern coming out of the Middle East.

For one, it's starting to look like a real possibility that Turkey will invade northern Iraq. Turkey has around 100,000 troops located on the border of the two countries, and I expect any day now to hear that they have entered into northern Iraq in pursuit of Kurdish rebels.

America has imposed its greatest sanctions against Iran since 1979, and there was an incident last week where the Lebanese army fired on Israeli warplanes. Individually, none of these would create enough worry to push prices too much higher, but taken together, you start to get the impression that things in the Middle East could erupt at any time... and it is that overall fear that results in higher prices.

As if inventory concerns and geopolitical concerns in the Middle East aren't enough to push prices even higher, there is another major influencing factor that we have yet to discuss: the falling American dollar.

Since oil is traded in dollars, any drop in the dollar will result in oil prices moving higher, and the dollar has been going through its own troubles lately. Just today, the dollar once again hit a new all-time low against the euro. (This is also the reason why gold is at all-time highs as well).

The final factor, and one that is totally out of our control, is Mother Nature. We are getting a glimpse today of the effect weather can have on oil prices. Storms in the Gulf of Mexico are responsible for today's sharp move to the upside, and weather might just be the factor that finally pushes us to the $100 mark.

Right now chances are that we will not have to face any large hurricanes for the rest of this year, but we have another worry to contend with... winter. Cold weather hasn't gripped America yet, but you can be sure it is coming, and when it does, demand for heating oil is going to push prices higher.

As you're starting to see, there are many things working in the favor of rising oil prices, all of which combined will likely lead us to $100 oil... but now the question is when?

If I had to bet, I would say that we will see $100 oil by the middle of November. It could be sooner, but I definitely think that it will be here in November. What are your thoughts? Do you think $100 is on the way, and if so, when?

[Photo: yomanimus]

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.