Over the past week, the cost to fill up your gas tank has sky-rocketed. Gas prices increased 17 cents a gallon last week, which is a huge increase. Tom Kloza, chief oil analyst at the Oil Price Information Service, said gas prices’ 6-cent jump reported Friday was the largest one-day increase since at least 2008. The national average price for a gallon of regular gas rose, for the 4th day in a row, to 4.6 cents to $3.33 on Friday, according to AAA. That brings the national average to the highest level since October 2008.
Turmoil in the Middle East is largely contributing to the rapidly increasing gas prices. Oil prices shot as high as $103 a barrel on Thursday as chaos in Libya disrupted crude supplies from the OPEC nation, and traders worried instability could spread to other oil-rich countries in the Middle East. The spike in oil last week could translate to an increase in gas prices of 37 cents per gallon in the coming weeks, according Moody’s Analytics economist, Chris Lafakis. He estimates that for every $1 increase in the price of oil, retail gas prices typically rise 2.5 cents a gallon. “This will definitely be the most expensive February gas prices ever,” he said, adding that gas prices are typically lower during the winter months. Many analysts are predicting drivers will see $4-a-gallon gas by summer.
The US uses roughly 400 million gallons of oil a day, and 68 percent of the oil it imports is supplied by countries at “high” — or “very high” — risk of instability. We send hundreds of billions of oil dollars annually to dangerous regimes overseas, making us subject to their whims and fortunes. And If Libya’s oil production remains shut down, oil prices will almost certainly go higher.