Oil trades at $107 a barrel, but backs down
By CHRIS KAHN AP Energy Writer
FILE - In this March 5, 2011 file photo, an anti-government rebel sits with an anti-aircraft weapon in front an oil refinery, after the capture of the oil town of Ras Lanouf, eastern Libya. Oil prices climbed to near $106 a barrel Monday as intense fighting between Libyan government forces and rebels appeared to be turning into a civil war and raised the prospect of a prolonged cut in crude exports from the OPEC nation. (AP Photo/Hussein Malla, File)
Oil prices continued to set new post-recession highs Monday as forces loyal to Moammar Gadhafi pounded rebels near a key oil port in Libya. The country, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Gadhafi after 41 years in power. Officials in the country say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time. Traders prepared for a worst-case scenario in which world supplies would be under pressure for months.
Benchmark West Texas Intermediate crude for April delivery gained $1.02 to settle at $105.44 a barrel on the New York Mercantile Exchange. The price almost hit $107 per barrel earlier in electronic trading, the highest level since Sept. 26, 2008.
On the New York Mercantile Exchange, gasoline futures lost 4.25 cents to settle at $3.0039 per gallon.
The Lundberg Survey of fuel prices said the average price of regular gasoline in the United States has jumped 33 cents per gallon in the last two weeks — the second biggest price increase over a two-week span on record.
In Chicago, the average was $3.72 Monday, up from 3.59 a week ago, according to AAA. The national average gas price reached $3.51 a gallon Monday. That’s up 14 cents, or 4 percent, over the past week. The week before, the average rose 20 cents, the steepest increase since September 2008. A year ago, the price was $2.75. The average is the highest it’s ever been this time of year, and analysts expect it to climb higher in the coming weeks.
OPEC has ramped up production to make up for the loss of Libyan crude. Also, the Obama administration is evaluating whether to tap U.S. strategic oil reserves to slow the rising price of oil.