Oil prices have room to go higher and could peak short of $100 per barrel, according to one Wall Street analyst.
"We think oil into the summer months will kind of top out at around $95+ a barrel," Bank of America head of global commodities Francisco Blanch told Yahoo Finance on Wednesday. He added that gasoline and diesel prices will also continue to rise. "So we'll see a firm run-up in fuel markets."
On Wednesday, West Texas Intermediate (CL=F) futures hovered above $86 per barrel while Brent (BZ=F) traded around $90 per barrel.
Crude prices have pushed higher in recent months amid production cuts by oil alliance OPEC+, attacks on Russian refineries, and escalating tensions in the Middle East, including cargo interruptions along the Red Sea region.
Blanch says geopolitical tensions have actually manifested in more demand.
"Ships around the world are having to travel longer routes. They cannot go along the Red Sea. And also they have to travel faster because by virtue of having to go on much longer journeys, you have to speed up those ships," he said.
Oil’s steady climb has prompted speculation on the path toward $100 per barrel, should current market conditions persist.
However, Blanch and other analysts believe OPEC will step in with spare capacity if prices get too high in order to prevent losing out on market share.
"OPEC is going to look at that and say ... let me get ahead of this and bring back some of my production, offset a spike, and maintain control of the market," CIBC Private Wealth US senior energy trader Rebecca Babin told Yahoo Finance on Tuesday.
"I think that puts a damper on this rally to $100 that some people are talking about," said Babin, adding she's watching for any signs of strained demand given the recent run-up in prices.
"You can't just have an explosive rally to the upside and think demand is going to be completely inelastic," she said. "The trigger, the bogey is Brent on $90 where we start to see some demand destruction."
The latest US Energy Information Administration data for last week released on Wednesday showed an inventory build-up of 5.8 million barrels, much higher than the more than 800,000 rise that was expected.
Analysts expect the recent crude rally along with strong travel demand to keep pushing gasoline prices higher heading into the summer.
Driving fuel, which normally rises in the spring, was one of the main drivers behind reaccelerating inflation in March.
On Wednesday, the national average for gasoline stood at $3.62, up $0.23 from one month ago according to AAA data.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.