The price of crude oil for April delivery ended the week at $104.42 on the New York Mercantile Exchange, the highest since September 2008. Sunday, the Obama administration said it is considering tapping the Strategic Petroleum Reserve in response to rapidly rising fuel prices brought on by the uncertainty in the Middle East.
Fighting in Libya has most oil production shut down. Friday, forces loyal to Moammar Gadhafi used tear gas against protesters in Tripoli, and rebels attacked the oil port of Ras Lanouf.
Saudi Arabia has increased production to make up for the loss of oil from Libya, but investors are worried that a long struggle could put pressure on world oil supplies. North Africa and the Middle East export a quarter of the world's oil.
Meanwhile, good news on the economic front back home has raised expectations of increased demand for oil. The Labor Department said Friday that unemployment rate dropped to 8.9 percent in February, retailers reported surprisingly strong revenue gains in February, and manufactured goods shipments were up in January.
The Energy Department said demand for petroleum has grown for four straight weeks, resulting in drops in the nation's oil and fuel inventories.
White House Chief of Staff William M. Daley told "Meet the Press" on NBC that although tapping the Strategic Petroleum Reserve is "something that only has been done on very rare occasions," that "It's something we're considering."
Opening the reserve would increase domestic oil supply and tend to push down prices. The Strategic Petroleum Reserve was established in response to the Arab oil embargo of 1973-4. It was tapped most recently in September 2008 in response to Hurricanes Gustav and Ike.
On the other hand, Energy Secretary Steven Chu said on Friday that while the administration is watching the situation closely, he's concerned about being "totally reactive."