Will oil prices continue to stay high?
Some believe spike as high as $200 a barrel is possible

HOUSTON - Oil's meteoric rise to near $120 a barrel looks like more than just another economic bubble — growing demand and tighter supplies are likely to keep prices high. Some analysts say even $200 a barrel would not be out of the question.

The latest price surge — pushing crude to record heights in recent weeks, and to nearly double its level a year ago — has some key components of a classic bubble, when market prices climb far above their intrinsic value. The burst comes when investors realize the assets are overvalued.

But growing worldwide thirst for crude, in large part from the rapidly developing economies of China and India, means frustrated consumers probably won't get any relief.

We can do our homework, but prices are going to go where they want to go at this point," said Jeff Spittel, an analyst at investment bank Natixis Bleichroeder Inc.

Americans who hoped to ride out temporarily high prices by carpooling or driving less may have to make those habits permanent. And because of the premium prices, oil companies may be willing to search out more oil in places they previously couldn't afford to explore.

Oil came close to $120 a barrel Friday on news that a ship under contract to the U.S. Defense Department fired warning shots at two Iranian boats in the Persian Gulf. The markets were also weighing the effects of a pipeline attack in Nigeria and a looming refinery strike in Scotland.

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