The International Energy Agency (IEA) has questioned the market belief that oil prices must inevitably continue to rise as the US dollar weakens.
Bullish commodities investors should be careful what they wish for, it said in its latest monthly report, released last week.
Capital has flowed into commodities before, especially in the second half of the past decade, before a recession-induced collapse in oil demand burst the price bubble, the IEA said.
It is happening again but under different circumstances.
A number of market factors underpinned crude's previous rise to nearly US$150 in mid-2008, including "strong demand growth, constrained supply, tight spare capacity and dislocations between available refinery feedstock, upgrading capacity and product specifications", the IEA said.
"Expectation of inexorably tightening oil markets in the future also played a role."
The near-term outlook for global oil demand is uncertain, although demand has been increasing faster in recent months than organisations such as the IEA and OPEC previously expected.
Markets are oversupplied with oil, there is ample spare production capacity in Saudi Arabia and elsewhere, and a large expansion of Asian refining capacity has eliminated the oil-processing bottleneck.
"Perhaps the key question is whether oil market fundamentals are strong enough to support another bubble, however briefly," the IEA suggested. "Given that the supply outlook remains comfortable and that stocks are plentiful, the recent rise in oil prices may prove to be temporary."
The agency said financial transmission mechanisms between monetary policy and commodity prices were complex, making it difficult to ascertain whether exchange rates drove crude prices or the other way around.
"Both variables react to a common factor – US monetary expansion, which depreciates the dollar but boosts demand elsewhere as oil becomes cheaper in other currencies," the IEA said.
But a rapid rise in oil prices would curb the buying power of US consumers, stunting recovery of the world's biggest economy. "So the conclusion that current monetary policy will inevitably drive oil prices higher on a sustained basis may be premature," the IEA concluded.
Global oil supply last month rose by 800,000 barrels per day (bpd) to 87.6 million bpd, largely because of higher production from outside OPEC, the IEA reported.
North America and China were expected to contribute to stronger oil supply next year.