Oil near $130 a barrel and gas getting closer to an average of $4 a gallon.
Crude prices spiked to yet another trading high yesterday as supply concerns mounted. At filling stations across the country, the national average price for a gallon of regular gasoline touched $3.80 for the first time, following oil's spectacular rise.
The June contract for light, sweet crude traded as high as $129.60 on the New York Mercantile Exchange before settling at $129.07, up $2.02 from Monday's record high. The expiration of that contract, which ended with the close of yesterday's trading, created additional volatility as traders scrambled to lock in positions.
It was the 10th time in the past 12 sessions that crude prices have hit trading or closing records, if not both.
The July contract, meanwhile, hit its own new high, trading up to $129.29.
"I keep making projections, and they keep turning out to be too low," said Darin Newsom, senior analyst at market analysis provider DTN. "We're already pushing up against $130. If we clear that, there's no reason to believe crude oil can't get to $140."
Drivers looking forward to road trips this holiday weekend will find no relief at the gas pump. The national average price for a gallon of regular gasoline is now $3.80, according to AAA and the Oil Price Information Service, meaning that gas prices are up about 19 percent from this time last year. Diesel jumped nearly 2 cents overnight to a record $4.54 a gallon.
Many analysts expect prices for both fuels will continue to rise.
Billionaire hedge-fund manager Boone Pickens yesterday said oil will reach $150 a barrel this year.
Producers are "running out of oil," Mr. Pickens, founder and chairman of Dallas-based BP Capital LLC, told CNBC.
"Eventually, the higher prices do change consumer behavior and investment patterns," Energy Information Administrator Guy Caruso said. "But there's no short-term magic wand. It's going to take time."
Oil futures are now selling for about twice what they were just a year ago. Prices have been propelled by a number of factors, including worries about insufficient supply, soaring global demand and a sliding dollar that has made oil cheaper for some buyers overseas. Speculative buying has also helped push prices higher, analysts say.
"It's a runaway market at this point," said Fred Rozell, retail pricing director at the Oil Price Information Service. "I think it's just money chasing money."
Crude's latest surge came one day after Algerian Energy Minister Chakib Khelil, OPEC's current president, was quoted by a government newspaper as saying the cartel won't boost output before its next meeting in September, adding to concerns about global supply.
Oil's rally has helped drag the price of refined fuels higher as well. Futures for heating oil, which is used as a proxy for the price of diesel, and gasoline both set records yesterday.