Oil prices are too high. Period.

NEW YORK (CNNMoney) -- Crude oil is trading at about $99 a barrel. That really doesn't make a heck of a lot of sense.

It's hard to not look at the huge spike in oil in the past week and immediately cry out: Speculation!

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To quote the omniscient narrator from the canceled before its time ABC show "Pushing Daisies" -- The facts are these.

There are no legitimate supply concerns regarding oil right now.

Yes, Libya is a worry as rebels try to wrest control of the world's 15th largest exporter of oil from Moammar Gadhafi. (You say Khadafi. I say Qaddafi. Let's call the whole thing off.)

But even though there have been cutbacks in Libyan oil production, Saudi Arabia has increased its production to try and offset the loss of Libyan supply.

"The Saudis have said they will supply anything Libya can't. Even if you take other countries like Yemen and Oman out of the equation, there is not going to be a short-term fall in supply," said Doug Ober, CEO of Petroleum & Resources Corporation (PEO), a closed-end fund based in Baltimore that invests in energy stocks.

Ober also noted that there finally should be more supply coming from the Gulf of Mexico again. The Obama administration approved a deepwater drilling permit for Noble Energy (NBL) on Monday, the first in the Gulf since last April's BP (BP) oil spill disaster.

Matt Freund, a portfolio manager with USAA Investment Management Co. in San Antonio, added that there is a healthy amount of oil in storage, which should alleviate any concerns about a supply shortage.

It also may be a stretch to suggest that the problems in Libya, even though they come soon after populist uprisings in Tunisia and Egypt, will really spread in a significant way to even larger producers of oil in the region, such as Saudi Arabia and Iran.

Rumors seem to be playing more of a role in what's going on with oil than anything else. Crude prices popped Tuesday morning on reports (which later turned out to be false) that Saudi Arabia was sending tanks to neighboring Bahrain to help quell unrest there.

"The run-up in oil prices is all due to concerns about 'what-if' situations," Ober said. "None of the fundamentals have really changed."

It's even more bizarre to wonder why new governments in any of these nations would suddenly decide to shoot themselves in the foot by disrupting the supply of oil given that this export is still their lifeblood.

John Derrick, director of research with U.S. Global Investors Inc., a money management firm based in San Antonio, said that the problem facing investors is that the region, to put it mildly, is highly volatile. Nobody can say with any certainty what will happen next.

Still, Derrick said there is too much speculation built into the price of crude.

"People are pricing in the unknowable," he said. "But if Libya settles down and there is no other major unrest, oil prices could pull back $10 bucks or so. Crude closer to $90 seems more reasonable."

Demand may soon wane given how quickly energy prices have spiked.

Supply, as any Economics 101 student knows, is only one part of the equation. Demand is the other. The average nationwide price for a gallon of gas is almost $3.38. That's an increase of more than 6% from just last week. Prices are up nearly 10% from a month ago.

At some point, consumer demand for gas should fall because prices have climbed too high. After spending heavily during the holidays, consumers seem to have embraced thrift once again.

The government reported Monday that spending was up just 0.2% in January even though personal incomes rose 1%. The savings rate climbed from 5.4% in December to 5.8% in January.

If consumers become even more frugal in the coming months, that should eventually lead to lower energy prices.

"Look at gas prices. We're not far away from having them reach a level where demand is impacted. The oil market is self-regulating to some extent," Derrick said.

Energy consumption may not just cool in the U.S. or other developed markets either. With inflation concerns running rampant in emerging markets like China and India, many foreign central banks are doing what Ben Bernanke and the Federal Reserve can't just yet: they are raising interest rates.

Any slowdown in the breakneck pace of growth in emerging markets could very well lead to less demand for oil globally. And that should cause prices to fall.

Robert Yawger, senior vice president of energy futures with MF Global in New York, said that if oil goes above $100 a barrel and stays there, that could make consumers around the world more nervous and less willing to spend.

"I don't care what country you're in," Yawger said. "The most healthy emerging economies in the world will be impacted by energy prices going higher. Developing markets are still way behind the developed markets."

The key though will be just how long the crisis in the Middle East lasts. Freund argues that consumers will be able to withstand the current spike.

But if the worst case fears of oil-rich nations falling like dominos comes to fruition, then all bets are off.

"Oil prices should moderate but the wild cards are where does the crisis spread next and how long it simmers," Freund said. "A quick flash like what we've seen in oil prices is different than a long drawn out increase."

In other words, oil prices should fall. Unless they don't.

-- The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.