It is hard to believe that just two days ago we were sitting here wondering if Monday would be the day we saw $100 a barrel for oil. Prices have been falling all week, and are moving sharply lower today following a bearish inventory report from the US Department of Energy.

Today's report showed that last week oil inventories fell by 400,000 barrels. I have found two conflicting reports online where one showed analysts polled by Dow Jones were expecting to see a 500,000 barrel drop, and another article showed analysts expecting the 400,000 barrel decrease that we did see. Either way, the main point is that inventories did not drop more than expected, which is what is pushing prices lower.

Prices had already been showing signs of weakness earlier in the day on mixed messages from OPEC, and all week traders have been pushing prices lower on fears of an economic slowdown.

Prices have since dropped $2.53 to $91.89. With today's drop in prices, we have now seen more than a 7% correction since Monday's high.

How low will prices continue to retreat remains to be seen, but the first part of December is going to be critical in determining just that. On December 5 OPEC is going to be meeting and there are indications (although mixed) that the oil cartel is preparing to lift its production quotas. This would send prices lower. We also will be keeping a close watch on the Federal Reserve when it holds its policy meeting on interest rates on December 11.

So far, indications are looking as though the Fed will more than likely opt to lower interest rates. If it chooses to lower the rates then this could easily counter-balance any sort of production hike from OPEC. While another rate adjustment is not a sure thing at this time, traders have already started to trade based on the assumption that another cut is on the horizon. Today, we definitely got even more of a reason to expect a cut after the news that existing home sales dropped again, this being the eighth straight month.

So there are still several things that we will have to keep an eye on, and a lot is still very uncertain at this time. What is not uncertain is the pain that Americans are still feeling every time they pull their car into the gas station to load up on gasoline. Prices at the pump are still sitting pretty high, with the national average coming in at $3.09 for a gallon of regular unleaded.

While this is shy of the record highs set earlier this summer, this is still very high for consumers and up from the $2.23 we were paying a year ago and the $2.75 we were being charged this time last month.

What about your part of the country? Where are you from and what prices are you seeing at your local gas stations?

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.