This week, oil prices hit a 2-year high at $103, reaching the highest level since September 2008. Gas prices have skyrocketed by an average of 35 cents per gallon since an uprising in Libya started a few weeks ago. A gallon of regular unleaded gained another 4.4 cents overnight to a new national average of $3.471 per gallon, according to auto club AAA, Wright Express and the Oil Price Information Service. Here in California, gas prices are well over the $3.75 mark.

Many experts predict the cost of fuel will continue to rise throughout the end of summer in 2011. The myriad reasons oil prices are trending up include:

Political turmoil in the Middle East continues to restrict supply. Many experts speculate the uprisings in Libya and Egypt are far from over and the violence is spreading. According to the Wall St Journal, Nymex crude prices have gained more than 20% since the Libya crisis began. Most of Libya’s oil production has been shut down since the crisis began in mid-February. The oil flow through Egypt has been restricted also due to the violence.

The US economy is showing signs of recovery. Economic recovery means more people will be driving to and from work, which can cause the demand for fuel to rise.  The Labor Department said the economy added 192,000 jobs last month. Unfortunately the good news for jobs is bad for oil prices.

Many cities in the US and Europe had record low temperatures and snow fall this year. The extreme winter weather in the US and Europe has driven up the demand for heating oil, further pushing oil prices up.

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