Oil prices hit a record high of $72.49 Thursday after weekly data showed a drop in U.S. gasoline stocks, raising worries that refiners don't have an adequate inventory cushion ahead of the peak summer driving season.
Traders also are anxious that U.S.-led efforts to stop Iran, OPEC's second-largest member, from pursuing a suspected nuclear weapons program could lead to a disruption in Persian Gulf oil supplies.
Gasoline prices were soaring all over the country, passing $3.00 a gallon, and in some places, even $4.00.
"The market is sizzling!" said Victor Shum, energy analyst at Purvin & Gertz in Singapore. "The gasoline stockdraw was large and it has raised concerns over gasoline supply in the U.S., which is really what's behind the price surge."
"Unrest in the Middle East, the price goes up. Local supply issues, the price goes up. Just basically, anything burps, and the price goes up," Seattle independent station owner Harold Hezel told Chris Filippi of CBS radio affiliate KIRO-AM (audio). He's charging $3.26 a gallon for regular.
Gasoline inventories typically decrease this time of year as refiners shut down their plants to perform maintenance ahead of the summer driving season.
There is additional worry about summer gasoline supplies because of the prospect of tight supplies of ethanol, which is needed in increasing amounts as refiners phase out their use of methyl tertiary butyl ether, or MTBE, which has been found to contaminate drinking water.