By CHRIS KAHN
ASSOCIATED PRESS
NEW YORK — Oil surged above $112 per barrel Friday following a drop in the dollar and continued jitters about shipments from the world’s major oil suppliers.
Benchmark West Texas Intermediate for May delivery jumped $2.49, or 2.3 percent, to settle at $112.79 per barrel on the New York Mercantile Exchange. Crude oil set new 30-month highs almost every day this week.
Oil moved higher as the dollar plunged against other major currencies. Oil is traded in dollars and tends to rise when the greenback falls and makes crude cheaper for investors holding foreign currency. The looming shutdown of the federal government threatened to weaken the dollar further and encouraged more buying, according to analysts.
Oil also climbed on fears that violence in Nigeria ahead of the country’s national election this weekend could lead to supply interruptions. And in Venezuela a massive blackout appears to have affected some refineries, analysts said. The two countries supply a combined 2 million barrels of oil per day to the U.S.
If crude prices keep rising, experts say, gasoline prices could hit $4 a gallon across the U.S. this summer.
Pump prices have jumped from $3.07 to $3.74 per gallon since the beginning of the year. The swift rise forced the Oil Price Information Service to boost its retail gasoline price forecast to a range of $3.75 to $4 per gallon this year. OPIS chief oil analyst Tom Kloza said it may not be long before the national average tests the all-time record of $4.11 per gallon set in July 2008.
Further price hikes could do serious damage to the U.S. economy, he said. For consumers, “gas prices have more relevance on an emotional level than a lot of other things that they pay for,” Kloza said. “People pay more attention to gasoline than phone service, cable TV or other services,” Kloza said.
The national average for a gallon of gas is now 88.3 cents higher than the same time last year, according to OPIS, AAA, and Wright Express. It’s already above $4 per gallon in California, Alaska and Hawaii, and it’s almost there in Connecticut, Washington, D.C., Illinois and New York. In Houston today, drivers paid an average of $3.673 a gallon, up from $3.659 Thursday.
Oil and gasoline prices began a steady rise in February, as the Libyan rebellion shut down the country’s daily exports of 1.5 million barrels of oil. Libya produces about 2 percent of world demand, and analysts say making up for those losses will severely reduce the ability of other oil-producing countries to increase production in the future. Saudi Arabia and other OPEC countries are covering some of the shortfall in Libyan crude, which went mainly to refineries in Europe.
Barclays Capital has said that Libya’s oil exports probably will be offline for several months. As fighting continues more traders are going along with that prediction.
“The market is being forced to consider a possible major loss of Libyan barrels probably through the rest of this year and into next,” analyst Jim Ritterbusch said Friday.
Experts point to other factors that have pushed oil and gasoline to record levels. The U.S. economy added hundreds of thousands of jobs this year. That means gasoline demand could increase this year as more workers join the daily commute. And last month’s devastating earthquake and tsunami in Japan put further pressure on oil prices. Japan is expected to boost oil and natural gas imports while some of its nuclear power plants are offline.
In other Nymex trading for May contracts, heating oil added 11.37 cents to settle at $3.3197 per gallon and gasoline futures gained 7.42 cents to settle at $3.2607 per gallon. Natural gas lost 1.6 cents to settle at $4.041 per 1,000 cubic feet.
In London, Brent crude rose $3.86 to settle at $126.12 on the ICE Futures exchange.
I started to watch Gasland again last night. Could not help but notice in the shot of the house were he grew up, there were two propane bottles behind the house. It appears that while he took a very public stand against the drilling for natural gas, he did not take a personal stand against the use of natural gas.
The oil price futures projections are complete B.S. and should have no bearing on fuel prices. This is a ploy to get more money at the pump. Use the reserves, re-introduce the nucleus by ford 1953 nuclear car, or just release the Manhattan technology developed to split Hydrogen from water with sound waves. The government boasts about these programs to wean us off foreign oil, but the truth is we don’t need it, we have plenty hear and we have more natural gas than anyone. Stand up to bureaucrats’ ignorance lets band together and create the next generation of energy the same way Linux open source created a superior platform to the MS Windows strangle hold. Pick up your pen lets make something happen, quit being complacent Generation X – slackers who follow in the footsteps of the baby boomers who put us in this position! see this website for options http://www.altenergy.com
Rest assured that the oil companies will soon be reporting massive profits along with the oil speculators.
The mega rich control this world and us lackeys must bow to their whims and give them our hard earned money.
How COOL!! Just as soon as the price per barrel quintuples, green energy will start to be a factor. Here comes your hope and change.
“Oil prices jumped to near $112 a barrel Friday as fighting in Libya damaged oil fields ”
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Should read “Oil prices jumped to near $112 a barrel Friday as speculators continue to write the book of ‘Excuses to Raise Oil Prices’”. Give me a break – 2% of the world’s oil does not warrant this “attention”.
Oil prices have nothing to do with Libya. The spike is due to speculators and the devaluation of the US dollar. Oil speculation should be outlawed.
yay im so happy gas is going up. a few months ago, it used to cost me $4 round trip to go to work.
now it cost me $7.
as obama said, i got a high milage car, got a tune up, changed the oil, spark plus, all that
yet it is still costing me alot
i noticed it is so easy for obama to say things when he
#1-being driving around
#2dose not punp gas himself
#3 the gas is paid for by our tax money
$4 when he has a million dollars in his bank acount
But Obama’s “let them eat cake” attitude says “get used to it” or “think about buying a new auto.” And be sure to buy a “government motors” piece of crap!
our friends at Exxon are speculating the price of oil up to new highs so they can take more obscene profits off the backs of the working class
A perfect example of a few hedge fund managers controlling a commodity by speculation and smoke and mirrors. The impotent administration and Congress ignore this fiasco for the sake of capitalism and the detriment of the consumer who suffers in a multitude of ways.
Bad news for drivers. Great news for drillers and oil field workers, as well as all the businesses that profit from their business–which is about all of them. I remember when they weren’t going to drill untill the price rose above $40. This is great for Texas economy.
Pure speculation. Sickening.
importing oil from the middle east was a mistake in 1974 and a much bigger misyake today . letting big oil dictate our foreign policy is a mistake.
the US DESPARATELY NEEDS ALTERNATIVE FUEL DEVELOPMENT. IF WE DON’T ACT NOW IN 10 YEARS WE WILL BE PAYING $7-8 GAL FOR GASOLINE. OIL COMPANIES WILL CONTINEU TO MAKE HUGE PROFITS AND THE MIDDLE CLASS WILL VANISH ..
AND IF GASOLINE HITS $ 4 /GAL THE ECONOMIC RECOVERY WILL END.
WHAT A MESS.
When I become Supreme Dictator speculators will be sent to retraining camps.
the Dimwits are still blaming Wall Street, speculators or whatever and meanwhile Obama’s energy plan is working. This hinges on making oil too expensive for Americans.
• Obama told people that under his plan “electricity rates would necessarily skyrocket”.
• Steve Chu now secretary of Energy wants to boost the price of gasoline to $10.00 a gallon.
• Obama has imposed a De facto moratorium on drilling in the Gulf.
• Obama has killed leases in Alaska,
• Obama has imposed Suffocating regulations by the EPA,
• Obama has imposed and raised taxes on oil and gas
Congratulations Obama your plan is working
And silver is now over $40 an ounce. Dollar tanking rapidly everywhere.
Stop all uncessary travel. Work, church, grocery store. Our economy will be devistated.
econ-opt wrote: split Hydrogen from water with sound waves
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Please explain why this wouldn’t require more mechanical energy than it yields as chemical energy.
Adios President NBC.
I have been complaining about this for the past month as 2% of the world’s oil does not merit a 30% jump in prices. Every day they raise the price more because of “fighting in Libya”, even though it has been going on for a month now and nothing has changed. But now I realize there is no point in complaining. Speculators and commodity traders will raise the price as much as they want to and all you and I can do is bend over and take it. There is no law or regulation to keep them from doing it, and that will not change. Might as well just accept that you are going to be paying $30 or $40 more per car per month now because the speculators say so. End of story.
why not produce more oil in the USA?
. . . “topped $125 on skepticism that Libyan output will rebound when fighting ends and as a weaker dollar increased demand for commodities”
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So oil continues to rise on the ‘FEAR’
” . . . topped $125 on skepticism that Libyan output will rebound when fighting ends and as a weaker dollar increased demand for commodities.”
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So oil continues to rise on the “FEAR” factor – no real shortage top speak of.
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The Oil Barons continue to rape us and REAP the PROFITS.
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Instead of Budgets the Congress should be finding away to stop these Bastards from screwing us!
After all the hoopla over oil companies causing earthquakes in Arkansas, the earthquakes have continued for over a month now, since the injections wells were shut-in. They had a 4.2 magnitude rumble today.
Obama is running us into the ground.