Crude oil prices closed at yet another record on Tuesday after a forecast that prices will just keep climbing.
U.S. light, sweet crude for June delivery closed at $121.84, passing the previous record close.
Oil prices have nearly doubled from about $62 a barrel a year ago, which Goldman Sachs sees as a sign that the world is in the midst of a "super spike" in oil prices.
The Wall Street firm predicted that oil prices could rise to $150 to $200 within two years, which seemed to motivate much of Tuesday's buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.
Analyst Arjun Murti said in a research note released Monday that prices would ultimately force demand to fall sharply.
Not everyone shares Goldman's view. Tim Evans, an analyst at Citigroup Inc., countered Goldman's analysis with a note predicting that crude prices could as easily fall to $40 a barrel as rise to $200 over the next two years because supplies are, as Evans put it, comfortable.
James Cordier, president of Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com, said Goldman's prediction isn't necessarily new: "We've heard numbers like these out of Goldman Sachs, especially over the last 12 months."
Indeed, it's not the first time Murti has espoused a super spike theory; in an April 2005 note, he predicted the oil market was in the early stages of an unprecedented rally that would send prices from a then-record of about $57 a barrel to $105.
But some investors respond to such predictions by buying, Cordier said.
A falling dollar on Tuesday also gave traders reason to buy. Investors often buy commodities such as oil as a hedge against inflation when the dollar falls, and a weaker greenback makes oil cheaper to investors overseas.
Many analysts feel the dollar's protracted decline is the real reason oil prices have nearly doubled since last year.
Cordier said investors are also increasingly concerned about falling oil production in Russia and Mexico, which are both major oil producers.
And prices are still supported by the concerns about supply disruptions in Nigeria and northern Iraq that first drove crude past $120 a barrel on Monday.
Militant attacks in Nigeria over the weekend cut some production at a Royal Dutch Shell facility.
In Iraq, Kurdish rebels warned they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq on Friday.
At the pump, meanwhile, the national average price of a gallon of regular gas slipped 0.1 cent overnight to $3.61, according to AAA and the Oil Price Information Service.
Analysts are split over how high gas will go; while prices have slipped lower since May 1, leading some analysts to say gas is close to peaking, others predict the fuel will follow oil's upward surge.
"You're going to see new highs for gas prices, probably for the weekend," said Cordier, who predicts an average price of $4 a gallon in the coming weeks.
In other Nymex trading Tuesday, June gasoline futures rose 5.58 cents to $3.1087 a gallon after earlier setting a new trading record of $3.1163.
June heating oil futures rose 5.32 cents to $3.3597 a gallon after rising to their own trading record of $3.3634, and June natural gas futures rose 16 cents to $11.338 per 1,000 cubic feet.
In London, June Brent crude futures rose $2.59 to $120.72 on the ICE Futures exchange.