Oil was hovering around $87 a barrel again Tuesday, its highest price level in 18 months.

The price of oil has been climbing steadily since early February.

"We think that the oil price increase is only of temporary nature, since it is driven by liquidity rather than by fundamental factors," said a report on commodities from Commerzbank in Frankfurt. "The recent increase in correlation between oil prices and equity markets, which has now reached unprecedentedly high levels underscores our view."

Crude traded in a range between $69 and $84 for about nine months before it broke out last week and started moving higher, as investors believe the economy is beginning to expand again.

"We have a general sense that the economy is improving, and investors are now able to see a possible outlook for greater driving demand," consultancy Cameron Hanover said in a report. "There may be a lull as we await this week's supply and demand statistics."

Now some analysts think oil can keep going higher possibly well over $100 again.