Prices dropped 13 cents on the day to settle at $66.71, but were down much more earlier in the session, hitting a low on the day of $65.82. Over the past 2 weeks oil prices have fallen by over $6 a barrel as investors have focused more attention on rising inventories and indicators that an economic recovery is not going to happen as quickly as some had hoped.

While traders typically focus the majority of their attention to the supply situation, prices were able to rise through the latter part of the summer as hopes of an economic recovery started to spread. Those hopes have started to come under pressure as the market receives more mixed signals as to just how healthy the economy is at the current time.

Unemployment remains on the minds of just about everyone. Unemployment is running at a 26 year high, and is expected to continue to rise in the months to come. We will get a better idea of the current unemployment picture this Friday when we the September unemployment figures are released. By all estimates, we should see more increases.

Perhaps the reason why oil was able to stage an afternoon come back from its lows is tomorrow's inventory report. A lot of traders are probably waiting to see last week's inventory numbers before doing too much trading. Analysts are expecting to see an increase of more than 2 million barrels, and anything above those numbers could really spook the market. We will get a better idea of investor sentiment tomorrow after the inventory report is released.

We also have to keep an eye on Iran. Iran is once again making news with its nuclear program. The country continues to insist that it is pursuing nuclear technology for peaceful reasons, but most of the world (including myself) are a bit weary of believing such claims.

Last week we learned of a second uranium enrichment facility that was built underground on a military installation, and yesterday the country sparked more controversy when it fired a couple test missiles that are reportedly capable of reaching into Israel, a country which has little love lost with Iran.

The U.N. has threatened sanctions against the country, but Iran does not seem all that concerned, stating that they will continue their program no matter what. They did, however, announce today that they would be soon releasing a time table for allowing weapons inspectors to examine the new facility.

To understand why Iran is important, you only have to look to the Strait of Hormuz, which is adjacent to the country. About 25% of the world's oil supply flows through the Strait.

For a better idea of how oil prices have been moving, let's close by taking a look at a current chart of oil: