Even as the advance in crude futures begins to appear unstoppable, with traders saying $55 a barrel seems possible, some analysts are convinced a speculative bubble has formed. They say prices have become inflated as institutional investors, such as hedge funds and mutual funds, pile on bets in the energy markets.

The price of a gallon of gas Monday was at $2.01 in Southwest Ohio and $2.06 in Northern Kentucky.

Light crude for November delivery soared $1.18 to settle at $51.09 a barrel Tuesday on the New York Mercantile Exchange - the highest level in the exchange's history.

"Oil has become the only game in town," said Fadel Gheit, senior vice president of oil and gas research at Oppenheimer & Co. in New York. "Every other investment vehicle has disappointed over the last 12 months."

But disappointment over stock market returns isn't the only factor driving institutional investors to energy futures.

Ed Silliere, vice president of risk management at Energy Merchant Corp. in New York, said fund managers are more worried that a major supply disruption in the Middle East, caused by terrorism or something else, would cause oil prices to skyrocket to a level that would wreak havoc in the global economy.

Tuesday's price surge came as traders remained nervous about violence in oil-producing giants such as Nigeria and Iraq and concerned about the slow pace of recovery in Gulf of Mexico oil output.

BP PLC said Tuesday that its daily output in the region is nearly 57 percent below normal and that it does not expect production to be fully restored until the end of the month.

Oil production in the Gulf of Mexico is more than 3 million barrels per week below average, putting U.S. crude inventories at historically tight levels and placing extra importance on imports at a time when the market is already nervous about possible supply disruptions around the globe.

On Wednesday, the Energy Department will release its weekly petroleum supply report. The nation's inventory of commercially available crude oil stood at 272.9 million barrels on Sept. 24, down 4 percent from a year ago.

"The market could keep going up in the near term until there is definite visibility that additional oil tanker loadings in the Middle East actually start to appear," said George Gaspar, an oil analyst.