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North Africa, Middle East drive up oil prices

February 22, 2011 12:00:00 AM PST
The protests in northern Africa and the Middle East have pushed up oil prices, and we're already seeing the effects at the gas pump.

The weeklong protests in Libya have escalated to violence and bloodletting as forces loyal to leader Moammar Gadhafi try to crush the uprising.

Out of this chaos the world is beginning to feel the pain as oil prices and gas prices surge higher.

As of Tuesday, the price of crude oil has climbed to higher than $95 per barrel, up nearly $6 in a day, pushing gas prices in the L.A. area that were just $2.93 last year and about $3.45 just last week, up to a whopping 12 cents more at $3.57 Tuesday.

The last time oil exceeded $100 and gas prices skyrocketed to $4 a gallon, experts say a panic switch flipped on and consumers changed their driving habits and even stopped buying gas-guzzling SUVs.

Air fares are one of the first signs that higher fuel prices will affect consumers. Monday most of the major carriers raised ticket prices $20 to $60 per round trip on some routes.

And that may be just the beginning of higher prices here if unrest in the oil-rich Middle East spreads to the point of oil supply disruptions.

In fact, that may happen sooner than later as Western oil companies are suspending oil production in Libya, which holds the most oil reserves in Africa.

On the other hand, Saudi Arabia's oil minister said Tuesday the country will protect the oil supply coming out of the Middle East, and tells investors and consumers alike not to panic.