Oil Market: Crude Futures Hit 31-Month High image

Oil rose to the highest in 31 months in New York on concern the conflict in Libya, Africa’s third largest exporter, will prolong production cuts and spread to Middle East producers.

By hitting 106.72 U.S. dollars a barrel, the New York crude benchmark has risen 17 percent since the beginning of 2011. Brent crude settled at 117.36 dollars a barrel, rising 24 percent during the first quarter.

Energy consultants Cameron Hanover said traders are beginning to view the Libya uprising as a stand-off with little sign of resolution.

“Optimism that Libyan oil might return to the market, seen earlier this week, was dashed,” the firm said in a statement.

In Libya, rebel forces struggled against government fighters, hampered by military deficiencies, The Wall Street Journal reported on its website Friday.
And if the situation is moving forward in this direction, gas at $3.50 a gallon may look good in a few weeks.

“Every time I drive past the gas station I’m checking to see if maybe one has come down a little,” Kidz Kab owner Melissa Danielson said. “I direct all my drivers to go to that for one day.”

Danielson says her transportation service for children has 10 vehicles, 12 drivers and uses a lot of gas.
Tons of gas,” she said.

Tucson still has the lowest average gasoline price in Arizona at $3.38 a gallon, but that’s up 4.2 cents since last week and about 18 cents since March 1. Diesel is also high. A gallon of diesel fuel now fetches $4.10, nearly a dollar more than a year ago. The highest recorded average price of diesel in Erie was $4.98, on May 31, 2008.
The situation in Hawaii is even worse. $4.225 for a gallon, while in California a gallon costs $4.059.