Oil prices briefly surpassed $55 a barrel Thursday and settled at their highest level since late October. The recent rally — crude futures are up more than $10 since the year began — reflects concerns that the world's petroleum supply is being stretched thin by strong economic growth, though some traders are nevertheless stunned by the commodity's rapid advance.

With gasoline futures also rising, analysts said consumers should expect the average pump price, now $1.93 per gallon, to climb in the weeks ahead.

The weak dollar and the apparent unwillingness of the Organization of Petroleum Exporting Countries (search) to pump more oil have contributed to the latest runup in crude futures, which are now 52 percent above year ago levels. However, analysts and brokers say speculative buying by hedge funds and others is magnifying the move higher.

"About the only way to explain this rally in the market is fund buying," said James Cordier, president of Liberty Trading Group in St. Petersburg, Fla. "They're pushing the market higher while producing nations are sitting on their hands and smiling ear to ear. This is incredible."

Analysts said that while crude futures could certainly rise further they do not expect prices to remain at these heights for very long. Eventually, producers and refiners seeking to lock-in future profits — and speculators looking to cash in — will sell into the market, they said.

That said, with the spring and summer driving season around the corner, analysts believe prices will remain well above $40 a barrel in the months ahead.

After climbing as high as $55.20 a barrel, light, sweet crude for April delivery settled at $53.57 on the New York Mercantile Exchange (search), an increase of 52 cents. The record close set on Nymex last October was $55.17, though prices would have to surpass $90 per barrel to meet the inflation-adjusted peak set in 1980.

In London, Brent crude futures rose 73 cents to $51.95 on the International Petroleum Exchange (search), retreating from intraday highs above $52 a barrel.

In other Nymex trading, gasoline futures rose 2.37 cents to $1.5075 per gallon. That followed an 8-cent rise the day before.

"This is especially bad news for consumers, given the fact that gasoline prices have risen from early March to the middle of May in 19 of the last 20 years," said energy analyst Peter Beutel of Cameron Hanover Inc.

The case made in support of today's high oil prices rests on the belief that the growth in petroleum demand, particularly in China but also in the United States, is being underestimated by economists. Moreover, this miscalculation, some say, comes at a time when producers are already having difficulty serving the world's 84-million-barrel-a-day oil habit, not to mention maintaining a supply cushion in the event of an unexpected disruption.

"We're going to be in an environment of high oil prices until the global economic activity starts to move back toward trend and starts to disappoint," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation in New York. Goldstein believes economists and even many oil analysts are not accurately calculating "demand at the margins," referring to the extra petroleum needed for the power and transportation sectors when incomes are rising.

But Goldstein refuted the idea that the global economy has not been affected by high oil prices. "Had we not had this runup, global economic activity would have been 0.5 percent higher than we saw in 2004," he said.

The other "big picture" factor, according to PFC oil analyst Jamal Qureshi, is the decline of the dollar versus other currencies "which makes OPEC more willing to let prices test higher."

Because crude is priced in the U.S. currency, OPEC countries want to maintain buying power in Europe and other countries after they sell their barrels into the global market.

Recent signals from OPEC officials that the cartel is unlikely to cut production at its next meeting — as some had earlier suggested — have failed to calm the market.

Victor Shum, oil analyst at Texas-based Purvin & Gertz in Singapore, said this was because the incremental supply added by OPEC would be heavy, sour crude, as opposed to the light, sweet crude that is in most demand.

Other constraints in the global oil market include the low levels of fuel kept in inventory, limited refining capacity and the scant excess oil-production capacity, according to Goldstein.

Goldstein estimated that there is about 1 million barrels of spare oil production, most of it in Saudi Arabia. He said the cushion needs to grow to 2.5 million barrels, or more, to ease the market's fear of an output snag.