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Could Instability In Libya Mean Higher Gas Prices?

Gas Prices

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CHICAGO (WBBM/CBS) – The instability in Libya is roiling the energy market Tuesday morning.

As WBBM Newsradio 780’s Regine Schlesinger reports, one Chicago analyst sees $4 per gallon gas a very real possibility $5 is not out of the question.

LISTEN: Newsradio 780’s Regine Schlesinger reports

As crude oil soared more than $7 to hit $93 per barrel in early-morning trading, energy analyst Phil Flynn of Chicago’s PFGBEST says the markets are reacting to the fear of worst-case possibilities.

“The truth of the matter is if we do not get one drop of oil from Libya, it can be made up by other OPEC nations,” Flynn said. “The problem is if we get another OPEC nation involved – do we lose production from, say, a Libya, maybe an Algeria? Throw to that concerns in Saudi Arabia could spread to that point of $5 a gallon.”

Flynn says another $7 per barrel spike would take crude to $100. If that happened, $4- to $5-per-gallon gas would be a very real possibility.

Turmoil has erupted in Libya, after a week of protests and bloody clashes in the eastern cities of the North African country sharply escalated a challenge to dictator Muammar Qaddafi. His security forces have unleashed the bloodiest crackdown of any Arab country against the wave of protests sweeping the region, which toppled leaders of Egypt and Tunisia.

As of Monday, the average retail price for a gallon of gasoline rose 2.8 cents per gallon in the week prior to $3.39 in the Chicago area. That was 56.6 cents higher than one year ago and 7.6 cents per gallon higher than a month ago, according to ChicagoGasPrices.com.

(TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)