Oil continued its march into record territory Tuesday, but should you jump in at these levels?

What’s driving oil higher?

It’s a combination of the weak dollar, surging global demand and speculation explains Addison Armstrong, Director Of Research At Tradition Energy on CNBC’s “Closing Bell.” All these factors are driving crude toward $120, but the weakness in the dollar is probably the largest component. A lot will depend what happens later in the month with the Fed.

If we were just trading on fundamentals where would price be?

I’d think somewhere between $75 - $85 a barrel, Armstrong replies. Remember we were at $86 in early February but then the Fed started cutting rates.

How are you playing it?

The trend is your friend, Addison replies. Every time there’s a pullback there’s a big wave of buying. I wouldn’t be short.

Find out how Pete Najarian recommends trading oil in Drilling for Dollars.

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Trader disclosure: On Apr. 22, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (YHOO), (MSFT), (INTC); Finerman Owns (GS); Finerman's Firm Owns (DAI), (MSFT), (NYX), (TSO), (VLO), (YHOO); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY),(COF); Najarian Owns (AAPL), (ENER), (NOK), (TSO), (XLF), (YHOO), (EMC); Najarian Owns (BHI) Calls, (DD) Calls, (MSFT) Calls, (POT) Calls, (CHK) Calls; Charles Schwab Is A Sponsor Of "Fast Money"

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