NEW YORK ( TheStreet) -- Oil appears to be taking a breather after its run from $90 to $106 per barrel, Tom Reilly, an options trader for SCS Commodities, told TheStreet's Joe Deaux.

Demand has been more of a factor in the rising oil price than events in the Middle East, according to Reilly. Refineries have been buying more oil to increase production of heating oil and gasoline.

As a result, he expects prices at the pump to drop by the end of summer although there may be a bit of an increase before then.

The Midwest, which has gasoline prices near $4.50 per gallon, has been much higher than areas such as the East Coast, which is around $3.50 per gallon, mainly due to problems with regional refineries. While neither is cheap, above $4 is where it really starts to pinch consumers, Reilly said.

Pinning oil near $105 could be the very high open interest in the expiring August contracts, according to Reilly. However, after expiration, crude could build a base around $105 before making a push higher. Volatility will likely remain low, assuming there isn't drastic news out of the Middle East.

Crude could gradually run to $100 over the next three weeks before pulling back into September, he concluded.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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