During the past two weeks, crude oil prices hovered around the level of 94-96 dollars per barrel of U.S. light crude, and about 114-116 dollars per barrel of North Sea Brent crude, despite the European sovereign debt crisis, and the daily warnings of an impending threat to the U.S. economy taking place in the next few weeks, if not days, should the U.S. Congress fail to reach a deal with President Barack Obama to raise the ceiling on U.S debt, which has exceeded $14 trillion. Prices rose again to their levels seen prior to the OPEC ministerial meeting on June 8, despite the fact that the GCC countries, in particular Saudi Arabia, have pumped around 750 thousand to one million additional barrels of crude oil per day, in addition to the approximately two million barrels of supplies made available by the members of the IEA from their strategic reserves in July, whether by actually tapping into the reserves or by reducing the quantities to be stockpiled in the current period. There are many reasons behind the oil prices recovery. There is the increased demand in emerging countries in Asia and Africa, in addition to the oil-producing Middle Eastern countries themselves, at a time when the economies of both Europe and the United States are experiencing significant tremors. This means that energy consumption growth rates in emerging nations and the Middle East now occupy a significant position in the global energy balance, and that the trend seen in the economies of these countries and their oil consumption levels has gained considerable weight and influence in the determination of the global price of crude oil. Another reason for the price recovery could be that the oil demand increase rate in the third quarter was closer to the levels forecasted by Saudi Arabia, than it was to the levels submitted by Iran and Venezuela, which meant that the markets needed more oil supplies, and that the demand for OPEC oils has been on the rise. Increased oil prices can also be explained by the weakened value of the dollar, especially in light of the warnings voiced by Moody's and Standard & Poor's, regarding the possibility of downgrading the U.S. economy in case Washington fails to agree on raising the debt ceiling. It should be mentioned that the U.S. commercial crude oil inventories levels at present stand at about (355.5 million barrels), or higher than the levels associated with the same period over the past years. This means that the markets are supposed to be reassured by the supplies available. Meanwhile, preliminary data show that the consumption of vehicle fuels in the United States, including gasoline and diesel, has fallen. In light of this information currently available in the markets, the question is what future trends can one expect? The recent monthly OPEC Oil Market Report predicts that demand for oil in 2012 will fall below its 2011 levels, because of the austerity measures adopted by many governments as a result of the economic crises, especially in the event the latter persist or spread further, and in case public debt and unemployment levels increase in the major Western industrialized countries. This is especially valid in the case of the United States, where unemployment stands today at around nine percent. In this regard, OPEC's OMR mentions that “US oil demand has been in the negative since May, causing year-to date total US oil demand growth to become almost flat.” Behind these many and conflicting indicators, there lies a fear of the possibility that the shortage of supplies from Arab countries may persist, as is the case in Libya, where previous production levels of about 1.7 million barrels per day may not be restored this year or even next year, because of the damage and devastation that have affected some oil installations. There is also the fear that destruction of oil installations may spread to other countries through, for example, bombings of oil pipelines, as happened in Yemen where the Marib major pipeline was bombed in mid-March (and was recently repaired), and where Saudi Arabia and the UAE donated 3 million barrels each to Yemen, to assist in compensating the shortage and to mitigate the internal fuel crisis. There was also the incident of an oil pipeline being bombed in eastern Syria. This is while bearing in mind that both Yemen and Syria are Arab countries that export oil, albeit in limited quantities that do not exceed a few hundred thousand barrels per day each. However, the continuation of the Arab Spring and the possibility that it may expand further, adds a new source of concern for the markets, pushing prices upwards. On the other hand, the IEA's initiative of dispatching about two million barrels per day of crude oil from its strategic reserves into the market, and the leaked reports that these reserves may be tapped again soon, may help stabilize prices. The fact of the matter is that prices in both the short and medium terms may respond to such factors, as the fear of new disruptions in Middle Eastern supplies pushes prices up, while tapping the strategic reserves of the IEA member countries may indeed help the cause of price stability. *. Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)