Investors are once again eyeing the sanctuary of the crude and gold, fleeing the rapidly weakening dollar and driving into hard assets, pushing the markets into an upward trajectory.

Crude prices have surged almost 25 percent in less than a month, evoking memories of last year’s spike and gas prices could soon eclipse summer highs. Over the past two weeks, crude prices broke through the $80-a-barrel barrier for the first time since September 2008, following a volatile year for the market. Since the summer of last year, oil has peaked at $147 a barrel and plummeted to lows of $32.

The debate of fundamentals vs. non-fundamentals kept raging last summer too. Consuming nations forcefully argued then it was the tight fundamentals impacting the crude markets and that the narrow supply-demand was to be blamed for the surging markets. On the other hand producers kept challenging the hypothesis, asserting it was the speculators, investors, fund managers, who were mainly responsible for the bull run in the markets.

With oil continuing its see-saw, are we slowly creeping back into the same scenario? Will oil rise above the century mark again? The question is no longer as far-fetched as it seemed a few months ago. But let’s be realistic. Oil markets have proven to be so volatile over the last year or so it’s still anybody’s guess whether oil will be closer to $100 or $30 six months from now.

Crude and gold are the safe havens investors often look to in times of turmoil. Most now seem to be conceding that it is not the fundamentals, but the weakening dollar that is the main driver behind the rapid increase in oil prices over the past weeks. Since March, the dollar has fallen 15 percent in inflation-adjusted value compared with the various currencies of its major trading partners. Traders have sought to cushion the fall in the value of their dollars by buying futures in traditional safe havens. Mirroring crude’s climb, gold too has soared this year — by about a fifth — crossing the $1,000-mark once again. It seems apparent traders simply want to hold on to hard assets.

And interestingly the current spike does not truly reflect genuine fundamentals. When oil prices rocketed past $140 in 2008, everything from geopolitics to limited spare capacity was contributing to the woes of the markets. There was virtually no spare production capacity anywhere in the world, so any supply disruption, such as hurricanes in the Gulf of Mexico and routine militant attacks in Nigeria, was enough to push prices up.

That has changed now. Fundamentals are completely different today. Observers are predicting a price spike point followed by a drop in global oil exploration and production. They argue that when economies rebound there will be a crude shortage. In the US for instance, exploration is down 27.8 percent from a year ago with 309 rigs actively drilling, compared with 428 the same time in 2008, according to the Baker Hughes Rig Count. Abroad, there are 8 percent fewer rigs drilling than a year ago — 764 down from 831. Smaller oil companies have cut back substantially on exploration.

But that is just part of the picture, not the complete one. Global spare capacity, so very important in soothing the nerves of the market, currently runs at about 6.7 million barrels a day, with Saudi Arabia accounting for 3.8 million barrels, or 56 percent of the total. This is different from the situation in July 2008.

In addition, oil storage tanks around the world are overflowing and would have to be reduced before any big price spike takes place. US crude inventories currently stand at 339 million barrels, up 27.7 percent from a year ago. In addition, since mid-September the Strategic Petroleum Reserve has exceeded 725 million barrels, a 27-year record. In fact, there is such a global glut that there is almost no place on land to put all the oil. An estimated 125 million barrels worth of crude is floating around on tankers scattered over the globe, according to Organization of the Petroleum Exporting Countries (OPEC). Normally, a negligible amount of oil is being stored offshore in ships.

Refineries, too, can ramp up and produce oil products, analysts say. US refineries are operating at around 80 percent of capacity, among their lowest rates in two decades.

There are also whispers that OPEC, which supplies more than a third of the world’s crude, could decide to open up the spigots when it meets in December. As OPEC considers pumping more crude, analysts said it’s uncertain whether global fuel demand is increasing enough to warrant more production.

“OPEC may want to calm the market with more crude, but it’s not clear that refiners have an appetite to take it,” Deutsche Bank’s Sieminski wrote recently.

Short-term crude outlook is not that rosy, after all. High inventories and weak market fundamentals might eventually weigh on markets and push prices lower says Edward Morse, managing director at Louis Capital Markets, a London-based brokerage.

Oil market fundamentals are weak and prices may not rise much higher, and may in fact retreat. “This is a dollar-led rally and unsustainable,” says Phil Flynn, an oil analyst with PFGBest Research, a futures brokerage.

Global crude markets are being driven today by pure financial considerations, by speculators and traders, and not the fundamentals. Despite all the possibilities — the bull run may not last long.