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Even though the demand for crude oil in the United States is slowing down, a number of factors on the supply side have investors bidding up the futures contracts, which rose by $4.51 to finish at a record $100.01 a barrel on Tuesday for front-month contracts.

Crude has surged by over $10 a barrel since the February 7 close of $88.11.

"This comeback in oil is absolutely amazing," said Phil Flynn, vice president of futures brokerage Alaron Trading. "The market seems to be dismissing the fact that a slowing economy will have an effect on demand."

The increase in oil futures caused an increase at the gas pumps of 1.8 cents, to bring the average nationally to $3.032 on Tuesday, according to the Oil Price Information Service, as well as AAA. The Energy Department added that they expect gas to top out at $3.40 during the spring.

Reasons for Price Jump

- Recent refinery blast at Alon USA's Big Spring, Texas, refinery. It could be shut down for two months.

- Production at Delaware refinery halted for repairs after power failure.

- OPEC saying there could be seasonal production cutbacks.

- Disruptions in production in Nigeria. Security problems and issues related to infrastructure maintenance could cut back production by 1 million barrels a day. Leaks in the pipeline have already stopped production of 130,000 barrels a day.

- Threats from Hugo Chavez to stop exports to U.S. from Venezuela. While they stopped supplying Exxon Mobil (NYSE:XOM), it is very unlikely Chavez will completely stop U.S. exports, as it's his main source of revenue which he uses to prop up his political standing in the country.

- France has cut its production in the North Sea by 280,000 barrels a day.

- Falling dollar.

While the problems above may seem formidable, in reality, only the falling dollar will have any long-term impact on oil prices.

With the falling dollar, investors bid up the cost of oil to offer a hedge against the dropping currency. Foreign investors prefer buying oil futures with U.S. dollars at these times; something they did Tuesday. 

For OPEC, it is expected if prices stay above $90 a barrel, that they probably won't cut production at their usual time in the spring.

The slowing world economy should also be a key factor in decreasing oil demand, and consumption is expected to slow this year, which should help counter the short-term effects of the temporary situations mentioned above.

Because of this, it seems the $100 a barrel won't be sustainable, and prices should start dropping again sometime soon.

Even so, some analyst say that the oil market is "decoupling" from the usual supply and demand basics that have guided the market in the past. By that they mean the continuing decline in value of the dollar and existing momentum are what is driving the oil prices higher, rather than the usual demand for oil.