Watch oil prices, they may be about to pop

Could U.S. oil prices hit $140 a barrel?
Could U.S. oil prices hit $140 a barrel?

Oil prices are poised to shoot through the top of recent ranges amid growing global demand and that could boost U.S. crude by some 36 percent from current levels, one analyst told CNBC.

U.S. crude futures were trading around $102.50 a barrel on Tuesday, not far off four-month highs hit last week above $103. Brent crude hovered at $110.50 and within sight of six-week peaks set last week.

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"Oil has been consolidating for several years in a sideways pattern and I believe that global demand is picking up and that's going to shoot it through the top of that range," Sean Hyman, editor of the Ultimate Wealth Report, told CNBC Asia's "Squawk Box."

"Once it finally does, we will see it hit $140 faster than a lot of people's heads can spin," he said, referring to West Texas Intermediate (WTI) oil.

He had a 30 to 90 day target of $110 to $113 for WTI and expected Brent crude prices to rally to $120 and then $130, implying a gain of as much as 18 percent from current levels.

Cold weather in the U.S. and unrest in oil exporting countries such as Venezuela in recent weeks have bolstered oil prices.

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The rally in oil markets has prompted some analysts to call for a pull-back in prices.

Andrew Su, CEO of Sydney-based Compass Global Markets, told CNBC last week that he believed oil prices are "way overvalued."

"It [oil] is a strong sell for us, we are targeting $95 at the end of the first half and we're taking the opportunity above $100 to short WTI crude," Su said.

Analysts at OCBC Bank are also looking for oil prices to slip back below $100 a barrel this year.

"We opine that global oil consumption is unlikely to match the rampant surge in supplies, despite the recovery momentum, given strong U.S. production," they said in a note published late last week. "As such, our outlook for crude oil remains bearish, with WTI and Brent likely to touch $85 a barrel and $95 a barrel by the end of the year."

Hyman meanwhile cited three reasons for his bullish oil outlook: a favorable technical pattern, a fall in oil production in Libya and increased global demand.

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"A lot of it [the forecast] is based on chart patterns, but there are fundamental dynamics such as Libya's oil production which has been ratcheted down. It's actually half of what it has been," he said.

"There's also a ratcheting up of global demand that the IMF [International Monetary Fund], the World Bank, has confirmed. The IAE [International Energy Agency] is talking about more oil demand coming on board, so I believe we will see that all coming this year," Hyman said.

The IAE said earlier this month that demand for oil among countries in the Organization for Economic Co-operation and Development (OECD) is expected to accelerate in 2014 in line with the broader economy. The IMF forecasts the world economy to grow 3.75 percent this year and 4 percent in 2014.

Writing by CNBC's Dhara Ranasinghe. Follow her on Twitter at @DharaCNBC