Since the uprising in Libya began last month, gas prices in the U.S. have jumped 29 cents a gallon, while oil prices leapt to the highest levels since 2008. That means Americans are now paying an extra $108 million a day for the same amount of fuel, according to The Associated Press. Analysts remain worried about disruptions to the world's oil supply, especially if the instability spreads to Saudi Arabia. "There's perhaps never been a more precarious time for gasoline prices," says Steve Hargreaves in CNNMoney. Some speculate that gas prices of $7 a gallon (or even higher) might be possible. Could costs at the pump really double? (See a local report about rising gas prices)
Yes, it's a "realistic possibility": Forecasts are all over the map, says Dan Dorfman at The Hufffington Post, but some analysts do say that gas could hit $7 if Saudi Arabia's oil industry is threatened. And really, one trader tells me, if Riyadh turns into Tripoli, "$7 a gallon could be a low-ball forecast."
"Risky roadmap to $7 a gallon gas"
No, prices could come down soon: Don't believe this Middle East domino theory, says market researcher Addison Armstrong, as quoted at CNNMoney. Setting aside hypothetical worst-case scenarios, current supply and demand suggests that gas prices will fall again before too long. Between the oil that's in storage and the capacity oil producers still have, disruptions in the Libyan pipeline aren't a big problem.
"Gas prices are going lower. Really"
Prices may go higher, but not much: "This year's fuel price apocalypse arrived early," says analyst Tom Kloza at Speaking of Oil. But these irrational fears about oil prices and supplies crop up seasonally. Unless the Middle East descends into utter chaos, prices will peak around $3.50 or $3.75 a gallon. Those forecasts of much higher prices are just out there right now because people have "books to promote, and newspapers or TV segments to sell."
"The fuel hits the fan"
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- 43 TV shows to watch in 2014
- The real story behind Deliver Us From Evil
- Beware of Splenda: The backlash against artificial sugars
- Stop making fun of philosophy and read some philosophy
- 6 things the happiest families all have in common
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- What is Molly? Everything you need to know about the party drug
- How to live a long life, according to science
- Sorry, we will not all be having sex with robots in the future
Why is Obama still smoking?
Subscribe to the Week