Crude oil prices rose $1.55 a barrel to close at $107.18, Thursday, a 1.8 percent gain and a high for the year, buttressed in part by a weak dollar -- the currency used in energy trading -- but muted somewhat by higher than expected crude inventories. According to the Energy Information Administration, U.S. oil stockpiles rose by 1.6 million barrels last week, topping analyst expectations calling for a 500,000 barrel increase.
However, some experts believe that oil could skyrocket even more, to $125 in the next few weeks, as global tensions, demand and cyclical market factors combine to drive the price even higher.
Crude prices in recent weeks have trended upward due to uncertainty in the Middle East prompted by tension bedtween Iran and Israel and concerns that the euro zone debt crisis might still unravel.
Adam Hewison, president of INO.com and co-founder of marketclub.com, two market and futures information sites, said the price of crude in the U.S. has not yet hit a ceiling.
We have to be prepared for increased crude prices and increased inflation, Hewison said. He added that it is very likely that U.S, crude will increase by an additional $13 to $15 over the next 14 to 21 days.
Besides activities in the Middle East and Europe, increasing demand from China and India and cyclical market trends are also weighing on prices, Hewison said, adding that crude falls into a trough every eight to nine months and hits a major high every 11 months. According to his calculations, the U.S. is five to six weeks away from this price peak.
It's almost like a perfect storm -- a perfect oil storm, Hewison said.