Oil prices have risen sharply today, despite news that oil inventories rose more than expected last week.

Traders pushed oil up $2.92 a barrel Tuesday to $69.63 even though oil inventories rose by 2.8 million barrels last week verse analyst estimates for a rise of 2.1 million barrels.

Oil prices dropped a bit today, as investors weigh news that consumer confidence took a hit in September.

Today's move was not a sizable one, but further evidence that investors are concerned over just how strong the current economic recovery really is. News came out today that consumer confidence is down in September as more Americans are concerned over the weak job market.

The oil industry has been working hard to find new oil reserves, and so far this year the efforts have been paying off.

It has been a year with some major discoveries that have put the oil industry in a good position to make it the year with the highest level of new discoveries since 2000.

A big reason for the increase in discoveries is improvements in technology that has allowed oil hunters to drill deeper and break through tougher rocks than they were previously able to do.

Oil moved up above $70 early in the session, but was unable to hold that momentum through the day. After its strong start to the day, prices dropped $2.19 to $67.83.

A major reason for the drop in prices can be attributed to the World Bank. The World Bank slashed its forecast for this year's global economic growth, and reported that the current recession is deepening.

It really matters little what the outside world thinks about the current conflict in Iran over the disputed re-election of Mahmoud Ahmadinejad, or whether the people in Iran are crushed by the totalitarian form of government that has been adopted. This is not a matter of opinion. It is a matter of fact by definition. There is a supreme ruler and what he says goes.

Nothing is more important to the ruling elite than remaining in power -- not the economic well being of it's citizens, not the education of the rural population, not the personal freedoms of the man in the street, and certainly not the rights of Iranian women.

The rulers of Iran are losing their patience with the election protests of the last few days. They are selectively tightening their grip on the freedom of the press, freedom of speech, freedom to travel and peaceful marches by disenfranchised voters that believe the reported results of a Mahmoud Ahmadinejad victory were a fraud.

The government is cracking down by not renewing visas for the foreign journalists, confining others to their hotels, and limiting all broadcasts and news outlets.

If anything can be gleaned from this, one only need take a brief glance at history to learn that a nation with totalitarian rule begets a totalitarian economy.

The Iranian government hand counted tens of millions of presidential election ballots in a couple of hours; less time than we count ours by computer -- an Ayatollahs' miracle for sure!

These results indicated that Mahmoud Ahmadinejad was able to garner two-thirds of the vote. Given the Ayatollahs miracle, the public viewed this result as anything but.

Protesters expressing their extreme objection to the election results then created a miracle of their own when up to one million marchers hit the streets forming a 5 to 6 mile parade of discontent, claims of fraud, and in some cases calling the government a dictatorship.

Meanwhile Ahmadinejad who made references to disgruntled fans after a football game in slighting the protesters, hung around for a couple of days before appearing a day late for a conference in Moscow. He missed some of the key events but he did get a chance to mention how bad the US economy was doing, neglecting to mention that Iran's economy is showing signs of falling off a cliff. If he remains president that is a real possibility.

Meanwhile the pragmatist in me knows that the greatest miracle of all would be a recanting of the election results and the president stepping down. The Ayatollahs have asked for an investigation of the election results to appease the fuming population.

The results of this investigation being conducted by the same folks that created the fraud in the first place are easier to determine than any of my stock picks. Look for the results of the investigation to acknowledge that the vote count was off by some meaningless percentage, not affecting the outcome and leaving the results as they stand.

The Ayatollahs are all for democracy as long as they get to choose who wins. Perhaps in the future they will simply default to the patterns of authoritarian rulers before them -- massive election rhetoric, with only one candidate on the ballot.

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Iran's great potential and its challenges!
Iran will waste four more years

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

The landslide victory of current president Mahmoud Ahmadinejad and the announcement of same, only hours after the voting polls closed, even though paper ballots had to be hand counted, has cast serious doubts about the election results.

Last week I wrote of Iran's great potential but today much of that potential has evaporated for the time being, and perhaps for another four years. The rulers of Iran have decided that the devil they know is better than the one they don't. Unfortunately, as far as politicians go, they may have gotten exactly that.

Today was a negative market from the start of trading, and the economic data just confirmed the selling, as hunting for green shoots looked more like hunting for four-leaf clovers. It seems that those analysts and economists saying that the market has risen too far and too fast are getting some more ears than in recent weeks.

The housing data showed a dip after two months of rising data, and the New York Empire Manufacturing data came in weaker than expected. Even the Iran turmoil after the election failed to rally oil. Here were today's unofficial closing bell levels:

Dow 8,613.04 -186.22 (-2.12%)
S&P 500 923.81 -22.40 (-2.37%)
Nasdaq 1,816.38 -42.42 (-2.28%)

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Iran's flawed democracy is still better than most of the political systems among other countries in the region. For the past few decades the morality police, prodded by religious literalism, have mandated women to cover themselves when they are out in public. This same religious literalism has impeded the potential of a country that has a large population, in a key geographic region, with oil and other natural resources.

Iran is in the midst of a presidential election that has stimulated much heated debate among the population about the failures of the current government in economic and political terms, and that has created a feeling of isolation. The isolation is more than a feeling, and it has limited the growth of the nation to something far less than its capabilities.

Oil continued its charge today and traded up 3.4% to close the week out at $58.63 and creates a situation where we could very likely be looking at $60 oil again by the end of next week. The last time oil was trading this high was all the way back on November 11.

On Monday we looked at oil, and noted that a big reason for oil's recent jump is increasing optimism towards the overall economy, and that is still the case. The Labor Department reported a drop of 539,000 non-farm payrolls in April, lower than the anticipated loss of 610,000 jobs.

Earlier in the session we were looking at lower oil prices, but the mood has changed, and the precious crude is trading higher with the overall market today, picking up nearly 2.5% on the day.

Yesterday, despite rumors to the contrary, OPEC decided to leave its oil output alone, and this had the initial reaction of sending prices lower in early morning trading. With oil prices falling sharply since last summer, many analysts had been expecting to see a production cut from the group, but instead OPEC announced that it would be leaving its output unchanged, and stated that previous cuts were starting to take effect.

The global economic slowdown is now reaching countries that once were immune from trouble. Let's take Iran, for example. Conventional thinking would be that Iran has so much oil money that their economy will not suffer. This is not true. A host of factors have converged on the Iranian economy to create an economic crisis.

First and foremost Iran's economy has suffered from a drop in the price of oil to below $50.00 per barrel. In August the International Monetary Fund warned that Iran could face a serious budget shortfall if oil prices slid below $75.00 per barrel.

The oil market breathed a minor sigh of relief Thursday after Saudi Arabia said there would be no replay of 1973-74 regarding the current Middle East crisis.

Saudi Foreign Minister Prince Saud al-Faisal said oil "isn't a weapon" to end the conflict between Hamas and Israel, Bloomberg News reported. Prince al-Faisal said oil can't reverse the conflict, countering a call by OPEC-hawk Iran that Arab states stop producing oil as a way to pressure countries supporting Israel.

Oil continued its recent downward trek Thursday morning on the news, falling $1.58 to $41.05 per barrel. Oil hit an all-time of $147.27 per barrel in the summer of 2008.

In 1973, the Arab members of OPEC implemented an oil embargo against the United States in response to the U.S.'s decision to re-supply Israel's military during the Yom Kippur War, which Israel won. The price of oil subsequently quintupled from about $20 per barrel to about $100 per barrel in 2009 dollars (or from about $3 per barrel to $13 per barrel in 1974 dollars), creating the world's first oil shock, and triggering a U.S. recession.

The other major energy commodities also declined early Thursday. Heating oil fell 2 cents to $1.54 per gallon, unleaded gasoline decreased 3 cents to $1.07 cents per gallon, and natural gas dipped 5 cents to $5.92 per million BTUs.

Oil moved above $46 yesterday. According to The New York Times, "One year after crude oil eclipsed $100 a barrel for the first time, the new year's trading began Friday with prices roughly half their year-earlier levels, and some believe oil could be headed even lower."

It is hard to make a bull case for oil, but not as hard as some imagine.

The stock market yesterday signaled that investors think that the economy is making a bottom and that perhaps the second half of the year will actually bring a recovery. If oil traders buy into that, they will begin to trade futures up. It is a fair assumption that an improving economy will require more crude.

Another, more obvious, reason is that OPEC will cut supply until prices go up. Some oil producers, both inside and outside OPEC, need the money from crude sales to keep their economies from sharp contraction. Russia and Venezuela are high on that list.

People watching the news think the war in Gaza will push prices up by interrupting demand. This is only true if Iran becomes involved and its territory is attacked. That is a long shot.

The large exporter that is very likely to see political turmoil that will cut its production is Nigeria, which is almost never mentioned in the debate over oil prices. Rebels cut supplies there several times last year. Only last week, a well-know militant was arrested by the government. That act could certainly lead to growing rebel activity to hurt the government. Hitting pipelines is not terribly hard. Defending thousands of miles of them is impossible.

The price of oil? Watch Nigeria.

Douglas A. McIntyre is an editor at 24/7 Wall St.