LONDON Oil is headed straight to $100 a barrel, Venezuelan President Hugo Chavez said hours after prices surged this week to an all-time high near $79.
But others remember the price collapses of the last four years and wonder if markets are headed for a repeat.
U.S. crude on Wednesday climbed to a record high of $78.77 a barrel, surpassing the previous peak of $78.40 reached in July 2006.
Prices have since fallen more than $2, trading near $76 a barrel on Thursday, as some analysts warn of a market correction.
"There will most likely be a sharp correction as prices are exceptionally high now," said Davide Tabarelli, chairman of energy research and consultancy company Nomisma Energia. "The market will sooner or later move back to equilibrium."
Since 2003, the oil market has entered into a sharp correction phase after climbing to its highs for each year.
After reaching last year's peak, prices tumbled 36 percent in the following six months to below $50 a barrel.
Analysts said this latest rally has been fuelled mostly by an influx of new investment money, instead of any big fundamental news such as hurricanes or Middle East tensions.
"We've been lacking bullish news for a while. When the correction starts, it could go very quickly," said Olivier Jakob of Petromatrix. "Going back to $60-$65 is not that far-fetched."
Compared with the rest of the energy complex, U.S. crude stands alone in its rally over the past month.
Prices for gasoline, fuel oil and other petroleum products have fallen since mid-July as U.S. refiners ramp up production and stockpiles rise. This has caused refinery profit margins to narrow.
Even U.S. crude's fellow benchmark, London Brent crude, has eased after reaching a 12-month high of $78.40 in mid-July.
Traders have taken note.
NYMEX crude oil speculators in the last two weeks have pared their record high net long positions, showing a reluctance to extend bullish bets on the market.
"Funds adding length of late, contributing to the upside, are now somewhat on the defensive and ... a significant pullback appears in the works," said Mary Haskins of MF Global Energy.
But for every major correction in the last five years, prices eventually recovered and surged to new record highs.
As for this summer, the output cuts that OPEC announced last year remain in place, the Atlantic hurricane season still poses risks to U.S. oil rigs, while geopolitical tensions in the Middle East and West Africa linger.
Chavez is not alone in believing oil's rally will continue. Goldman Sachs said last month prices could reach $95 by the end of the year.