The Tropical Storm Isaac is expected to affect oil production in the Gulf of Mexico. While it is uncertain where the storm will hit, it is common for oil prices to increase in the presence of a natural disaster, and its after effect.
Surprisingly, oil has fall on speculation that the U.S. will open its oil reserves to hold the rising cost of oil.
The actual chart is indicating that, the oil price could be in retreat towards the $102 mark where it should find some support.
Since mid June 2012, oil prices have increased from $89 to current levels and while its showing signs of not been oversold, it may need to go into a small correction.
Besides the damage that Issac might cause to the industry. Oil production most definitively will be interrupted, as workers in the area will have to be evacuated.
If damage is insignificant, the US government may be force to open its reserves. It seem that oil prices are destined to fall, not matter what. But perhaps not for long. If the price remains around the $110 level, prices could again push higher towards the $120.