Gas Prices Rise Over Libya's Turmoil

As fighting continues in Libya and young people in the Middle East threaten similar uprisings, the price of oil continues to rise, which could dramatically affect the nation's economy.

Fierce fighting continues on the streets of Libya. Despite the use of deadly force by Moammar Gadhafi's supporters, opposition forces have pushed closer to Libya's capital of Tripoli and have said they're more united than ever.

The turmoil abroad has added pressure on gas prices in the U.S.

The price of a barrel of oil has spiked 18 percent in the last ten days. Unrest in the Middle East has made oil speculators nervous.

"What it affects is the market," said Brian Newbacher, director of public affairs for the American Automobile Association. "And with the fear of unrest spreading to bigger oil producing countries like Saudi Arabia or Iran, that's what's driving us."

According to AAA, the average price nationwide for a gallon of regular gasoline is $3.28.

"It's gone up $1.20 since last August and it's just killing us," said Henry Bishop, a truck owner and driver.

The higher gas prices also threatens to slow down the already fragile U.S. economy.

"Every dollar increase in the price of gasoline cuts consumer spending by a $120 billion," said Jon Osbon, of Osbon Capital Management. "That's a lot of money."

Saudi Arabia has entered into talks with European refiners about making up the shortfall caused by disrupted oil production in Libya. That move has brought oil prices down by just a few dollars.

However, continued political unrest in the richest oil producing countries in the world has kept speculators on edge.

Once the turmoil in Libya has ended, gas prices are expected to fall. However, analysts say don't get used to it.
CNN