One of the country’s more incisive energy minds, Alan Gaines, who seven months ago correctly predicted $4 a gallon gas – at the time it was in the mid- to high $2 range – is now saying that a confluence of factors could easily produce $5 a gallon gas this summer.

Mr. Gaines, chief executive officer of Houston-based Dune Energy and a former top institutional energy analyst, told The New York Sun that those factors could include the current shortage of gasoline inventories, a really hot summer, supply disruptions arising from troubles in Iran and Nigeria, or another serious hurricane in the Gulf, 13% of whose production is offline.

These factors, he says, also could easily produce $90 to $100 oil, as well, versus Friday’s close of $75.17.

Equally significant are the implications for interest rates. The gushing oil price, says money manager Leonard Mohr of Los Angeles-based MCR Associates, re-enforces his conviction that the Fed, contrary to overwhelming Wall Street expectations, is in no position to call it quits on future interest rate increases, given the inflationary ramifications of the burgeoning price of oil.

With oil this high and the economy as strong as it is, how, he asks, can anyone realistically believe the Fed is near the finish line? “Wall Street,” he contends, “is in for a dismal awakening” because, as he puts it, “I don’t believe we’re anywhere near the end of rate increases in the current credit-tightening cycle.”

Mr. Mohr has been on target in his rate projections. He’s been predicting higher rates since September, when the Fed funds rate, now 4.75%, was at 3.5%.

What’s more, he’s on record with a highly contrary forecast that the Fed funds rate is headed to 6% before the Fed finally decides to stop tightening. He believes there’s always a possibility the Fed might decide to pause before going to 6%, but he feels any such pause would be temporary.

Barring the unexpected, the May 10 meeting of the Federal Open Market Committee will produce the 16th consecutive interest rate hike since June 2004 – a rise of 25 basis points, to 5%. That anticipated hike, plus the possibility of one additional boost of 25 basis points, to 5.25%, perhaps at the FOMC parley in late June, is widely expected to wrap up the current tightening cycle.

Recently, disclosure of the notes of the Fed’s March meeting indicated it was near the end of the tightening trail. How real this is, however, is open to question, since the market has been so wrong in assessing the Fed’s next move. For example, ever since the Fed funds rate hit 4% last November, leading economists have repeatedly warned any further rate increases beyond that level could set the stage for an economic hard landing and possibly precipitate a recession. Obviously, with the rate now at 4.75%, it’s clear the Fed believes such gloomy thinking is way off base.

Significantly, a gradual and growing number of economists have been inching up their rate forecasts. What’s more, some who originally thought the Fed might begin to cut rates late this year are starting to have second thoughts.

While Mr. Mohr’s outlook for a 6% Fed funds rate is inordinately high compared to general expectations, some isolated forecasts are beginning to approach the 6% level. For example, Allen Sinai, the chief global economist and strategist at Decision Economics, a New York economic advisory firm, is a hair away with a prediction of 5.5% by year end.

While he says he expects the economy will lose steam in the second half, he says there’s no cause for alarm, given likely 3% GDP growth this year, spurred by ongoing strength in business spending, increased exports, a robust global economy, strong cash flow, about 3% growth in consumer spending, and increased hiring. If he’s right, it suggests inflation is alive and well.

Meanwhile, let’s not get away from the bottom line, which could be tough news for the financial markets and the man in the street: In brief, the spike to $75 oil could be a forerunner to $5 a gallon of gas and a tougher monetary stance from the Fed.