Oil prices could climb to unprecedented levels if the worst fears of analysts are realised.
Calculations used by experts yesterday pointed to crude oil hitting $90 a barrel, regardless of the turmoil in the Middle East, which has already sent markets into a spin.
US crude oil futures have already hit the highest ever front month price of $78.40 a barrel, breaking out of a range previously held in at $75.
That left the graph formations and calculations used by technical analysts pointing upwards to $80 and well beyond.
"It is hard to argue with the charts at this point, as the bullish stance is clearly in view," Edward Meir, at Man Energy, said yesterday.
"A breakout like this usually ushers in more chart-based buying."
He added: "What is less obvious is where the next resistance may lie given that we don't have any technical signposts to guide us.
"At this point, the psychologically important $80-level looms as the next target, although we could easily move much higher."
His warning came as the price of oil erractically seesawed over concerns about the situation in the Middle East.
It fell more than a dollar a barrel in response to a report - which was rapidly denied - that Israel could end its offensive against Lebanese Hizbollah guerrillas within days.
Israel's Channel 10 television carried the report, citing a senior military officer.
But an Israeli government spokeswoman quickly responded, saying Israel had no plan to halt the offensive.
Concern that the conflict could escalate and spread to Middle East oil producers had earlier sent London Brent crude to a record high of $78.18 per barrel.
But the price fell back to $76.52 before rallying again to $77.21.
"Given the importance of geopolitics to the market at the moment, prices will see-saw with the news flow," said Eoin O'Callaghan, economist at BNP Paribas.
"There has been so much geopolitical news in so short a time that you are going to get large fluctuations in prices as the news flow changes."
Israeli aircraft blasted Lebanon after Hizbollah rockets struck deeper than ever into Israel, with no diplomatic initiative in sight to end the fighting.
Neither Israel nor Lebanon are oil producers, but both lie at the heart of the Middle East, which collectively pumps nearly a third of global output.
The war threatens to suck in Hizbollah's Syrian and Iranian allies, and to compound the conflict between the West and Iran over Tehran's nuclear programme.
"The crisis has quickly taken on a regional hue, with both Washington and Tel Aviv accusing Iran and Syria of orchestrating the attacks," said Washington-based energy consultants PFC in report.
"As a result, US policy toward Tehran is likely to harden even further, and could undermine already fraught efforts to resolve the Iranian uranium enrichment issue diplomatically."
On Sunday, Iran condemned a decision to return its nuclear file to the UN Security Council after it delayed accepting incentives aimed at stopping it from developing nuclear weapons, saying it undermined the prospect of further talks with the West.
And in Iraq, scrambling to restore its oil exports to prewar levels, the head of the country's North Oil Company was kidnapped in the capital, the second high-profile abduction in two days.
Mr O'Callaghan added: "There is plenty to keep prices inflated.
"On the one hand geopolitics, and on the other fundamentals are tight.
"And we also have the possibility of hurricanes."