Oil at $120 per barrel?

Once unfathomable, it's now possible, and in the near future -- as in the summer 2008 -- if current trends continue.

Economist H. David Wang told BloggingStocks that a convergence of "bullish events" could take oil "well over the century mark next year." Oil traded early Thursday around $95.50 per barrel.

"We know about emerging market demand, and the various political issues which pose a threat to supply, but now there's concern that OPEC won't strive to increase production because of the falling dollar, because most oil transactions are priced in dollars," Wang said. "That's a concern. That's exactly what the market does not need at this time. Up to now the market has factored-in OPEC cooperation. But now we hear OPEC talking about a lack of a need to raise production. If OPEC doesn't raise production, we're looking at $110 or even $120 per barrel oil by the summer of 2008."

Further, technical indicators supported Wang's analysis. Technically, the biggest hurdle will be the $100 level. In addition, oil's chart displays a healthy increase, followed by a mild-correction pattern. If the pattern continued, oil would trade through $100, correct to around $85-$90, before continuing its run through $100 in the months ahead.

One New York fuels trader, who spoke on condition he not be identified by name, said he thinks the $100 mark is "a done deal" and that most fundamental factors, both short-term and longer-term, favor a move higher by oil.

"With global supplies tight, it doesn't take much to move this market higher," he said. "Iraq, Iran, Mexico production issues, now OPEC balking at production increases on the falling dollar - - with each event oil jumps about $3," he said. "There will be some profit-taking [on oil's move above $95], but it's not smart to short this market right now."