Motorists Caught Over A Barrel

Gasoline now sells for a $1.22 a gallon on average, that's 31 cents more than in February. What's happening at the gas pump?

To find out, you have to go into the oil pits on the floor of the New York Mercantile Exchange, where the price of a barrel of oil has doubled in the past year, reports CBS News Business Correspondent Anthony Mason.

And oil trader Mark McCann says, "I think we're going to go higher."

Asia's rebound, he says, is the reason for the turnaround. "Those countries that were in depression or recent recession last year now want oil again."

And while demand is up, OPEC has cut supplies back. The oil producing countries have set production quotas before, but in the past they always cheated on them.

"The reason there is so much more discipline now than there has been in previous times is because they were so much more traumatized," says energy analyst Daniel Yergin.

The scare, says Yergin, came last July when oil prices completed a yearlong 50 percent plunge bottoming at nearly $10 a barrel.

"There were fears it would fall to $5 a barrel, which would have had devastating impacts on the national revenues of these oil exporting countries," Yergin says.

Fear has a way of binding people together -- but temptation can split them apart. And now that oil prices have been pushed back up, the temptation to break those production quotas may be too great. After hitting $25 a barrel a month ago, oil has slipped back.

McCann says it's "because now they're thinking that maybe OPEC countries are starting to cheat again."

But all these ups and downs have only brought gas prices back to where they were two years ago. And, adjusted for inflation, analysts will tell you, a gallon of black gold is still a bargain.