NEW YORK - Oil surged above $112 per barrel Friday following a drop in the dollar and continued jitters about shipments from the world's major oil suppliers.
Benchmark West Texas Intermediate oil for May delivery jumped $2.49, or 2.3 percent, to settle at $112.79 per barrel on the New York Mercantile Exchange. That's the highest price since Sept. 22, 2008.
If crude prices keep rising, experts say, gasoline prices could hit $4 a gallon across the U.S. this summer.
It may not be long before the national average tests the record of $4.11 per gallon set in July 2008, said chief oil analyst Tom Kloza of the Oil Price Information Service.
Further price hikes could do serious damage to the U.S. economy, he said. For consumers, "gas prices have more relevance on an emotional level than a lot of other things that they pay for," Kloza said. "People pay more attention to gasoline than phone service, cable TV or other services."
The national average for a gallon of gas is now 88.3 cents higher than the same time last year, according to OPIS, AAA, and Wright Express. It's already above $4 per gallon in California, Alaska and Hawaii, and it's almost there in Connecticut, Washington, D.C., Illinois and New York.
Crude oil prices set new 30-month highs almost every day this week.
Oil moved higher Friday as the dollar plunged against other major currencies. Oil is traded in dollars and tends to rise when the greenback falls and makes crude cheaper for investors holding foreign currency.
The looming shutdown of the federal government threatened to weaken the dollar further and encouraged more buying, according to analysts.
Oil also climbed on fears that violence in Nigeria ahead of the country's national election this weekend could lead to supply interruptions.
And in Venezuela a massive blackout appears to have affected some refineries, analysts said. The two countries supply a combined 2 million barrels of oil per day to the U.S.
