NEW YORK -- Despite a deep global economic recession, oil prices have doubled so far this year. But oil traders and market watchers see price moderations -- if not an outright correction -- that might provide summer gasoline-price relief to U.S. drivers.

Indexes tracking commodity prices, with oil at the forefront, have been rising lately at the fastest rate since the 1990s as mercantile exchanges mirrored the renewed optimism on the stock markets. And the sliding value of the U.S. dollar following Treasury's difficulties with auctioning fresh government debt have helped spur energy and metals higher as investors once again seek a hedge against the devaluation and expected future inflation.

But demand is still weak and stockpiles high. There are even reports of a shortage of tankers as several loaded with oil sit idle waiting to offload.

"I've been a little bit confounded by the rally that we've seen over the last couple of months," said Paramount Options President Ray Carbone. "The money flowing into the commodities markets seems to easily overwhelm the fundamentals."

Oil futures edged lower again yesterday for the third straight day. From a seven-month high of more than $73 a barrel on June 11, prices closed at just above $70, though they were headed upward again this morning.

Still, energy traders at the New York Mercantile Exchange acknowledge that the market has not been following the supply-demand picture over the past couple of months. They see prices leveling off or even falling back some over the summer, barring any strongly bullish news.

But any fresh sign of weakness in the industry, which could come today or tomorrow after the American Petroleum Institute and the U.S. Energy Information Administration release the most recent figures, is predicted to send the market in reverse.

"I think the market's going to pull back to the low 60s first, and then there might be regrouping, and that would challenge $70 again," said Tim Jennings, a NYMEX trader at Vantage Trading. "I think for the short term we've seen the high."

The strong growth in prices for commodities, especially oil, has surprised many on Wall Street. Goldman Sachs analysts recently revised their three-month summer price forecast upward sharply, from $52 a barrel to $75. But other market players see a ceiling at about $76 and feel oil will likely trade between there and the mid-$60 range for much of the summer.

The reason, they say, is that the world is awash in oil, with inventories at all-time highs. Spare capacity, which some argue is an even more important indicator, is also way up, as producers with the Organization of Petroleum Exporting Countries (OPEC) have honored production decline targets when a barrel of oil slid to about $35 at the end of 2008.

Ironically, though they have succeeded in halting the earlier sharp fall in the oil market, reports show that stronger prices are now actually encouraging OPEC members to cheat on their targets and put out more supply. Energy watchers say that OPEC compliance is now about 66 percent as producers find the temptation to sell more too irresistible.

And traders are growing cognizant of the fact that high oil prices threaten the global economic recovery and rebound in energy demand that they have been predicting. Better economic performance in the United States should help the dollar recover in value, analysts say, and that, combined with fears of premature "demand destruction," should see the energy markets pulling back.

"We are looking for a demand recovery this year, but we think that now we've got higher prices, that's actually going to slow down the rate of this recovery, and so you might not actually see the type of robust demand growth that we're expecting," said Ruchir Kadakia, an associate director at IHS Cambridge Energy Research Associates. "In addition, we're looking for the dollar to strengthen, and that should put some pressure on oil prices."

Others agree that the fundamentals will inevitably catch up with the market.

The recent run-up has been driven by fears of future high U.S. inflation and a greater devaluation of the dollar, macroeconomic trends that probably won't come to pass until next year, experts say. Though energy traders often pride themselves on moving ahead of the curve, as evidenced in futures trading being higher than spot prices, analysts predict they will soon see the danger of flirting with $80 a barrel in a weak economy.

"We have more oil in storage than we've had for almost 15 to 20 years. So there's plenty of supply," Jennings said. "It's kind of vexing to some people that the market can be moving higher on that news."

Anticipating oil-price rally

But while a slowdown in the commodities markets should ease the concerns of consumers, and government officials are worried that the recent price spike will put the brakes on any economic recovery, analysts warn that the bulls will be back this winter and beyond.

Though no one sees a return to $100 a barrel or higher prices anytime soon, oil futures for the out months are still trading slightly higher than contracts for July delivery.

And last week's much scrutinized BP Statistical Review of World Energy confirmed that energy consumption by the developing world last year overtook that of the rich-nation Organisation for Economic Co-operation and Development (OECD) for the first time, rising to 51.2 percent of total energy usage. Non-OECD nations make up about 45 percent of global oil consumption, but that figure is expected to rise above 50 percent, as well, in the coming years.

Traders and market analysts alike see prices toward the end of the year rising above $80 a barrel after the summer lull that most are now anticipating. Goldman Sachs predicts West Texas Intermediate to sell for $85 at the end of 2009, from an earlier forecast of $65, and at least $95 a barrel in late 2010.

"The recent rally in WTI prices is likely to be but the first stage in the oil price rally that we expect will accompany a recovery in economic activity," Goldman analysts said in a note to clients.

Still, fears in some corners that prices at the pump will continue to climb over the summer are unfounded, unless some major geopolitical event like war in the Middle East upsets the markets.

"It would be really difficult to find an environment that can sustain $100 oil right now, because there is no demand, and at $100, you're going to see OPEC producing as much oil as they can," said Kadakia at IHS CERA.