That increase was because of the unrest in Libya which is, unlike Tunisia, Egypt, and Bahrain, a significant oil producer.
According to the AAA, prices at the pump have increased to $3.17 a gallon for regular gasoline, an increase of six cents in a week.
The New York Times reports:
"With consumers paying roughly 50 cents more a gallon than a year ago, analysts are warning that prices could easily top $3.50 by the summer driving season."
As an expert in the area of predicting gasoline prices, I am willing to bet a Starbucks Grande Mocha that we'll be peeking at $4.00 per gallon by this summer; $5.00 in California.
The other OPEC countries have announced they will make up the difference between what Libya doesn't pump/ship to ensure a stable price.
Why? Because at some point, higher oil prices will put enormous negative pressure on the fragile economic recovery in the west and having a double-dip recession doesn't help the OPEC producers which are using oil revenues to buy peace among their populations.
Oh, yes. This is all connected.
It is not unlikely that, just as Saddam Hussein did in Iraq, Moammar Gaddafi will sabotage Libya's oil fields. In fact, Time magazine reported last night: "Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports."
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And it's not just the U.S.
The Daily Mail carried a piece today which raised a red flag saying, "The soaring price of oil could derail the global economic recovery and tip the West back into recession, experts warned last night. Brent crude surged nearly $3 a barrel to $108.57 in London as the violence in Libya threatened to spread to other oil rich nations in the region."
Go to the Safeway. Buy milk, eggs, white bread, and peanut butter.
Now.
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