TORONTO (Reuters) - Rocketing oil prices may prompt some investors to look to energy names as a safe haven in the wake of this month's Toronto Stock Exchange correction, but market watchers are urging caution before plunging into crude.

Propped up by a weak US dollar, geopolitical factors and speculators, the price of a barrel of oil briefly hit a record high of $99.29 this past week and some speculate the psychologically important $100 level will be reached in the near future.

At the same time, Toronto's S&P/TSX composite index took a sharp turn downward over renewed financial-sector worries tied to the liquidity crunch and US subprime mortgage turmoil.

"So far, investors haven't been too concerned about the impact of sky-high crude prices on the consumer and the global economy," said Elvis Picardo, investment strategist at Northern Securities, in Vancouver, British Columbia.

"But if things continue in this vein, that's definitely going to be another factor to add to the feeling of doom and gloom that's been quite pervasive the past few weeks."

That's because the oil price could exacerbate any economic slowdown in the United States. This in turn could lead crude to a pullback, sinking exposed energy shares as well.

"I think we're due for a pullback in energy prices," said Julie Brough, vice-president at Morgan Meighen & Associates in Toronto. "Normally, you do get a pullback kind of in the September-October season, which we didn't get this year."

The boom in oil has in part been triggered by speculators fundamentals such as seasonality.

"I think right now that there's scepticism that these prices will be maintained," Brough said.

That scepticism could be behind why the Toronto market hasn't rallied behind the jump in oil prices. If crude is expected to retreat, the smart money is being cautious in bulking up on energy stocks.