NEW YORK (AP / CBSNewYork) – The current average price for regular gasoline in the Tri-State Area is about $3.27. The unrest in Libya could drive that even higher at a time when gas prices are set to move up for their annual Memorial Day push of about 15 cents a gallon.
Oil prices soared to more than $93 a barrel Tuesday as Libya’s uprising spawned violence and chaos that threatened to affect crude production and even spread to other larger OPEC nations in the region.
Libyan leader Moammar Gadhafi’s grip on power weakened steadily as the protests spiraled out of control. Key government officials at home and abroad resigned and air force pilots defected amid a bloody crackdown on protests in Tripoli, Libya’s capital.
At least 250 people have been killed in the clashes, according to the U.N. Office of the High Commissioner for Human Rights, following weeks of demonstrations in neighboring Egypt that ousted its long-serving president.
Markets, fearing an unpredictable power vacuum, braced for the worst. Benchmark crude for March delivery was up a massive $7.70 at $93.90 a barrel at late morning European time in electronic trading on the New York Mercantile Exchange.
While investors are concerned about Libya – the world’s 18th largest oil producer providing almost 2 percent of global daily output – the greater fear stalking markets is that the revolts will spread to OPEC’s heavyweights.
WCBS 880 Connecticut Bureau Chief Fran Schneidau reports
Oil analyst Peter Beutel told WCBS 880 Connecticut Bureau Chief Fran Schneidau, “It is now moving to the point where it is a dagger pointed at the heart of the oil production in the world, which is centered in Saudi Arabia.”
Saudi Arabia produces close to 10 percent of the world’s daily consumption of oil.
“Everywhere around Saudi Arabia is now influx or on fire and the big concern here is that this could spread to Saudi Arabia which produces 8.4 million barrels a day,” Beutel said.
With no resolve in sight Beutel said, “I’m as worried as I’ve ever been, I mean, things don’t look good at all.”
Victor Shum, an energy analyst at Purvin and Gertz in Singapore, noted that the global market could cope with significant disruptions in Libya.
“The worry is about what’s next. What if protests persist in Iran and things get out of hand?” he said.
In Iran, government opposition groups this week held their largest protests in more than a year, resulting in two deaths, though the demonstrations have failed to gain the momentum seen in North Africa.
Looking ahead, there are also knock-on effects from high oil prices. A jump in energy costs could hurt consumer spending and stymie a fragile recovery in developed countries.
The Lundberg Survey of fuel prices released Sunday says the average national price of a gallon of regular is $3.18.
Analyst Trilby Lundberg found in the survey completed Friday that the average price for mid-grade was $3.32, and premium was at $3.43.
Diesel was up nine cents, to $3.59 a gallon.
Billings, Mont., had the lowest average price among cities surveyed at $2.95 a gallon for regular. San Francisco was the highest among surveyed areas at $3.54.
Fresno had California’s lowest gas prices at $3.42 for a regular gallon.
According to AAA, Connecticut’s average price for regular unleaded gasoline is $3.371. In New Jersey, it’s $3.049. In New York, it’s $3.407.
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