LUBBOCK, TX (KCBD) – Local gas prices jump as unrest in Libya causes a spike in oil prices to the highest level in two years. Drivers can expect to pay almost 13 cents more a gallon as most stations raise prices late Tuesday into Wednesday morning.
Charles Bolton, owner of Bolton Oil, tells us before his final prices for Wednesday came in late Tuesday afternoon the markets had fluctuated so much that they changed 15 times.
"Usually in the gas market you see a penny or two cents, and it is rare that you get a nickel or a dime hike," explained Bolton.
Oil jumped five percent to $95 a barrel Tuesday, the highest in two years. Some analysts have even speculated that prices could reach $5 a gallon. "I don't see that happening. I don't think we could handle it," Bolton said.
"It could happen. Yes, that is very possible," Chair of the Petroleum Engineering Department at Texas Tech University Dr. Mohamed Soliman explained.
Born in Egypt, Dr. Soliman has been in the oil business almost four decades and has worked on the ground in Libya, currently the world's 18th largest oil producer.
"You don't have to have a decline in production to see increase in prices. The perception that there will be a shortage is enough to raise the price immediately."
Sadly, Dr. Soliman says he doesn't expect the situation in Libya, which sits on top of the largest oil reserves in Africa, to end peacefully.
The fight between protesters and those loyal to Libyan strongman Moammar Gadhafi threatens oil production.
Dr. Soliman, who says he anticipated the Egyptian revolution, expects the wave of change to spread to neighboring countries which could keep the markets on edge. "Right now it's (protests) happening in Bahrain which doesn't produce much oil but right beside it is Saudi Arabia, Abu Dhabi, and Qatar which do produce oil and gas."
Bolton says as goes the market, so do prices and he hopes they level off. He says prices can change hour to hour and it is just a wait and see situation.
"It affects everyone. It's one commodity that we all have to have," said Bolton. He says that higher prices initially won't keep customers away because most of them will fill up for fear prices will spike even higher.
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