NEW YORK (CBSNewYork/AP) – Amid the chaos and turmoil in Libya, some analysts believe that oil prices will soon skyrocket.
But according to Oil Price Information Service analyst Tom Closaw, that's not the case. The sky is not falling in the world of oil, he said.
"The world has sort of lost its head a little bit," said Closaw, who does not foresee $4 or $5 gasoline.
LISTEN: WCBS 880's Sean Adams reports on one expert's perspective on Libya's effect on oil prices
The unrest in Libya has created a fear premium and the market can absorb any loss of Libyan production, he said. Plus, the pressure to sustain the economic recovery will keep prices in check.
"High prices—$100 a barrel for crude oil, $3.75 gasoline—have consequences on demand in the United States and elsewhere that might temper the runaway nature of the market," he said.
Meanwhile, AAA Mid-Atlantic said the average price of regular gasoline on Friday was $3.14, up 10 cents from last week.
That's also much higher than a year ago, when New Jersey motorists were paying $2.55.
The national average price also rose to $3.29, up 13 cents from last week. That's also much higher than the national average from a year ago, which was $2.69, according to AAA Mid-Atlantic.
The sharp boosts are due to surging crude oil prices, which are being driven by the tumultuous situation in Libya and fears that the unrest may spread to other oil producing areas in the Middle East.
Saudi Arabia, another oil-rich country, would have a different impact on price, Closaw said.
"If we wake up one morning and we hear about violence on the streets of Riad or Jetta or Saudi cities, all bets are off as far as where prices go," he said.
For consumers to save money on gasoline, CBS 2's Cindy Hsu spoke with AAA-New York's Robert Sinclair about ways to save at the pump.
(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 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 This material may not be published, broadcast, rewritten, or redistributed.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.)
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