Processing Magazine

Oil Settles Above $105 as Gasoline Demand Rises

March 24, 2011

Oil prices made up for a week-long slump following the Japanese earthquake and are now trading at the highest levels since September 2008, according to the Associated Press. Prices climbed early Wednesday after an Energy Department report showed that gasoline consumption continues to grow despite sharp price increases at the pump. Traders also kept a wary eye on pro-democracy protests and outright rebellions in North Africa and the Middle East. The region supplies 27 percent of the world''s oil. Crude prices jumped after a bomb exploded at a crowded bus stop in central Jerusalem, killing one person and wounding 20 others. Authorities called it the first major Palestinian militant attack in the city in several years. Benchmark West Texas Intermediate crude for May delivery added 78 cents to settle at $105.75 per barrel on the New York Mercantile Exchange. Oil hasn''t settled that high since Sept. 26, 2008. The Energy Information Administration''s report suggested that motorists are handling higher fuel costs without cutting back. At a national average of $3.548 per gallon, gasoline pump prices are the highest ever for this time of year and have reached a point where economists expect consumers to start to cut spending.