Every day as I watch oil prices, I keep waiting for the market to take a breather and bring prices back down, but it just isn't happening yet. Prices are on the move yet again today, setting another new record, busting through the $110 barrier and hitting a high of $110.34. Currently oil is sitting at $110.23.

Today's move should come as no surprise if you keep up with the current situation surrounding the U.S. dollar. The dollar has been in a literal free fall lately, and is on the decline again today, with the fragile greenback falling to under 100 yen. In case you were wondering, this is the lowest for the dollar versus the yen in the past twelve years.

The main reason for what we are seeing is widespread fear that America is entering into a recession. Some well respected professionals, including billionaire Warren Buffett have said that while the current environment defies traditional definitions of a recession, America is basically already in a recession. The economy grew by 0.6% during the fourth quarter last year.

The result of the recession fears is that the market is already banking on getting at least one, if not more, interest rate cuts in the months to come. The result -- a weaker dollar, and that is all oil traders need to hear to keep pushing prices into record high territory.

Typically, oil traders invest based on their perceived picture of the current supply and demand picture. That is no longer what is really taking place. By all accounts, supply is OK. No one is really doubting that, and in fact we saw a larger than expected increase in supplies in America yesterday, but that has done absolutely nothing to cool the market. We have entered a new sort of environment.

Traders have decided that the evidence of a coming recession and further interest rate cuts is enough to keep the price of oil at these levels. And frankly, they are probably right. The dollar is showing no signs of reversing, and trust me, as an American living in Europe I would give anything to get things to turn around again. Unfortunately, it just doesn't look like that is in the cards, at least not for another quarter or two.

What are your thoughts? Should the FED continue to lower interest rates, or are the recent cuts going to be enough to set the economy back on the right path? Would you be willing to invest in oil at these prices? When we look at oil later this summer, will $110 oil be a memory of how out of control things got for a while, or will we be remembering $110 oil as the "cheap oil" that we should have been investing in? I'm curious to hear your thoughts.

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