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Prepare for Pain at the Pump

Fuel prices soaring as Libya teeters towards civil war.

by on Feb.22, 2011

The Libyan revolt is having a direct - and immediate - impact on oil prices.

It’s a long way from Libya to Los Angeles, but the violence that is tearing apart the Northern African nation is already being felt halfway around the world.  There are the humanitarian implications, of course, considering the mounting death toll and the threat of civil war as Libyan President Muammar el Qadaffi desperately clings to power – but there’s a practical side that is rapidly impacting those who have ignored the latest headlines.

And that will likely be apparent on your next visit to the gas pump.  Oil prices are soaring.  The benchmark Brent Crude surged to $105.45 a barrel during Monday trading.  West Texas Intermediate was “only” at $91.42, but that was still a one-day, $5.22 jump.

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“We are watching this very closely,” BP Chief Executive Bob Dudley said from London, as petroleum futures surged to the highest levels seen since prices started retreating after hitting record levels in mid-2008.

How far up things might go is unclear, but “The oil market could easily jump another $10 in the short term if the violence continues,” David Cohen, director of Asian Economic Forecasting at Asian Economics, warned.