Oil prices have been on the move today, climbing over a dollar following this week's inventory report. According to the Energy Department's Energy Information Administration, last week oil inventories dropped for the fourth straight week.

Analysts had been expecting to see inventories fall, but had been expecting to see a decrease of only 800,000 barrels for the week when the actual draw was 3.5 million barrels.

Today's jump is a sign that traders are still willing to overlook fears of a slowing economy and focus on the inventory picture. As the subprime mortgage mess has created widespread fear of a possible recession waiting ahead, oil has fallen pretty sharply from its last month's highs. After hitting a record high of $78.77 on the first of the month, precious crude fell as low as $68.63 last week, a 12.8% selloff during the month.

Oil prices have traded up $1.01 today to $72.74 and hit a high earlier in the day up at $72.93. With today's move, we have seen a 6% rebound from last week's low, but traders should still be skeptical of oil heading back up too much past the $74 or $75 level.

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.

What a difference a week can make! It wasn't that long ago, August 1 to be exact, that oil prices were setting record high prices and appeared to be ready to charge above the psychological $80 barrier. Well, that was 9 days ago and 10.2% above oil's current price, as concerns over the U.S. economy have pushed prices down by more than $8 a barrel.

Currently we are seeing prices down another 87 cents to $70.72.

So what is the major problem here? I wish I could pinpoint the concerns down to one single factor, at least that way we would be able to try to figure out exactly how deep the problem goes, but unfortunately there are several factors weighing down oil prices at this time. They include (but are not limited to):

• Reports suggesting a sluggish U.S. economy
• Concerns that the subprime mortgage woes are spreading into different areas in the market
• Jobless claims have been on the rise
• Disappointing July retail numbers
• Ongoing uncertainty over supply coming out of the Middle East

The picture is pretty dim at this point. The main problem is, of course, the impact from the subprime mortgage meltdown on Wall Street. Credit concerns have spread across other areas of the market and many are fearing that corporations are going to start to really feel the impact of lower consumer confidence. This has been reinforced lately in the form of weak July sales from retailers.