This just in: gas costs $3.50 a gallon. If it doesn’t where you live, just wait. It soon will.
The AAA’s daily fuel gauge shows the national average for regular is $3.50. I believe it was $3.47 on Friday. There’s nothing magical about the $3.50 level, except for its psychological effects.
The big problem is that with $3.50 here, the $4 level comes within hailing distance, and it was when gas prices hit $4 in the summer of 2008 that the feta really hit the fan.
Listen, the real fear here isn’t an end-of-the-world kind of thing. Whatever happens in the Middle East, at some point the world will return to something approaching normal, like it always does (which is not exactly the same as normal; when you think about it, we live in a pretty dysfunctional world.) The real fear, for us here in the U.S. at least, Europe, too, for that matter, is that the uprising drives oil prices high enough to derail the recovery.
Crude prices are up more than $2 this morning, pushing Nymex crude futures to near $107/barrel. Brent, the European benchmark that is more directly affected by the events in Libya, is pushing $118/barrel (and lots of people note that a big chunk of U.S. gas prices, being imported, are more sensitive to Brent prices than Nymex.) Given that it takes a few weeks for crude prices to filter through to y0ur local service station, you can expect that prices will keep rising.