Since the middle of July we have been able to breathe a little sigh of relief as oil prices have been heading lower from the recent record highs. However, this morning oil prices are getting a slight boost as traders try to digest additional supply concerns.

Lately, it has been hard to discuss the state of oil prices without mentioning Iran and its controversial President, Mahmoud Ahmadinejad, and that holds true again this morning. Over the weekend, the leader of the Islamic Republic caused even more tension over his country's nuclear program.

Iran has been claiming for the past couple of years that it has only peaceful intentions regarding its nuclear program, but of course the rest of the world, in particular Israel and the United States have voiced openly their distrust, and have claimed Iran has a more sinister intention ... nuclear weapons.

Not only has Iran openly admitted to having 3,000 uranium-enriching centrifuges, but earlier this month the country really got the rest of the world worked up when it had 2 days of missile testing, including missiles with ranges long enough to be able to hit Israel. Many questioned why Iran would put on such a show considering the pressure it was already facing from the United Nations, but even more alarming was news that came out over the weekend regarding the country's nuclear program.

Before Saturday the world was aware that Iran has 3,000 centrifuges, but now Iran is claiming to have twice as much, or 6,000 centrifuges. As you can imagine, this has only stoked the fears of many that Iran is looking to pursue nuclear weapons, and ups the risk that some sort of military strike could be in the not so distant future against the oil-rich country. Even more alarming is the country's announcement of its long term plans to move towards large scale enrichment, which would involve upwards of 54,000 centrifuges.

Since Iran is the second largest oil producer in OPEC, any sort of disruption in supplies coming from it would be enough to send oil prices at least to their recent highs, and probably much higher than any of us really want to even think about.

Iran is not the only country to cause concern -- Nigeria also deserves some mention. Over the past several years Nigerian production has dropped significantly as a result of rebel attacks on its pipelines and infrastructure. Once again there were reports of attacks on two pipelines Monday, but there were no firm details on the impacts of these attacks.

Nigeria has been in a state of violence for some time now and it is becoming more and more dangerous for foreign companies and foreign workers to operate in the OPEC nation. Just this weekend there were reports of eight foreign workers being kidnapped, but luckily they were released only hours later.

Nigeria is a huge supplier to the United States, and any disruptions in the country will trickle down to higher oil and gasoline prices back here in the States.

On Friday, oil prices closed out the week at $123.26 a barrel. While compared to a year ago this price is insanely high, compared to just a couple of weeks ago when oil hit an all time high of $147.27, it is actually a good bit lower.

The concerns over Iran and Nigeria initially pushed priced up as high as $125.22 this morning, but they have cooled off slightly, and are currently trading up 56 cents to $123.82.

The next couple of months are going to be very interesting for oil. The heavy demand summer driving months will be over, but a few other factors, in particular the rapidly approaching hurricane season, will be in the headlines. After already getting through one hurricane this year, the fall months will undoubtedly bring more and more storms in the Gulf, and all it would really take at that point is one or two strong hurricanes to send prices soaring again.

For now, despite today's upwards move, we are still enjoying a nice pull back in oil, and therefor a little relief at the gasoline pumps. I'll close with a chart of oil to get a better perspective on how things have been doing over the past couple weeks:



Where do you see oil prices headed as we move out of the summer months and into the fall / winter period? Should we expect to see prices continue to move lower, and possible head under the $100 mark, or should we plan to see prices reverse their current trend and head back towards the record levels we witnessed earlier this month?

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.