Oil prices tracked higher on Friday, firmly planted above $55, supported by a forecast that the market could spike to $105 and by concerns that U.S. gasoline supplies may fall short to meet peak summer demand.
Prices have climbed 28 percent this year as signs that rapid demand growth in Asia's emerging economies and the United States will strain world supply ignited heavy buying from big-money speculative funds.
U.S. light crude traded up 20 cents to $55.60 a barrel, moving back toward the record high of $57.60 struck on March 17. London's Brent crude climbed 36 cents to $54.65 a barrel.
Top energy derivatives trader, Goldman Sachs, said in a report on Thursday the oil markets might have entered the early stages of a "super spike" period, which could drive prices toward $105. "That was a pretty big call by them (Goldman Sachs) and the market is just assessing where supply and demand really sits," said David de Garis, senior economist at ANZ Investment Bank in Melbourne.
"The market is still of the mind that supply/demand is still very tight but the fundamental situation is not nearly as bad as what current oil prices would suggest."
Goldman Sachs raised its 2005 and 2006 price forecasts for U.S. light crude to $50 and $55, respectively, from $41 and $40, citing resilient oil demand growth.
Prices rallied 2.6 percent on Thursday on the back of the report but also on growing concerns over falling gasoline stocks in the United States ahead of the peak summer demand season.
"I don't know if we will get another big up day on Friday, but if we settle above $55.65 that will be another positive and will point to higher prices," said John Brady, a broker with ABN AMRO in New York.