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Oil, gas prices continue volatile run (Updated)

March 7, 2011 | 11:08 am

World oil prices were trading near some of their highest levels in almost three years as widespread combat continued in Libya, one of Africa's biggest crude producers, and worries continued about the spread of unrest in the Middle East. The severity of the effect of rising retail gasoline and diesel prices on U.S. consumers was increasing, both directly and indirectly, with the highest fuel costs ever recorded for this time of year.

Brent crude futures for April delivery were up 62 cents at $116.59 a barrel, which was a small retreat from their earlier $118.50-a-barrel peak earlier in the day, which was their highest level since September 2008.

U.S. crude futures for April delivery on the New York Mercantile Exchange were 85 cents higher at $105.27 a barrel, down slightly from an earlier high of $106.95 a barrel. That was the highest price for U.S. crude since Sept. 26, 2008, when the front-month contract reached $108.11 a barrel. [Updated: Crude oil futures for April delivery ended the day on the NYMEX up $1.02 to settle at $105.44 a barrel.]

In Libya, troops loyal to Moammar Kadafi used artillery and helicopter gunships to block rebels from advancing west from the oil hub of Ras Lanuf toward Kadafi's hometown of Surt. There are conflicting estimates, but as much as half of Libya's oil production of 1.65 million barrels a day has been shut down because of the conflict. Libya has Africa's largest proven reserves, ahead of Nigeria and Algeria.

For the second straight week, California had the nation's highest average price for a gallon of regular gasoline, at $3.987, up almost a penny overnight and 13.6 cents higher than a week ago, according to the AAA Fuel Gauge Report.

The national average for gasoline was $3.509 a gallon, up 14.1 cents over the past week.

Diesel climbed to $4.233 a gallon in California, up $1.122 a gallon compared with 2010. Nationally, a gallon of diesel fuel cost an average of $3.870 a gallon, which was 79.1 cents a gallon higher than the year-ago price. Diesel is the fuel of commerce in the U.S., widely used in the trucking industry, in railroads, agriculture and construction. When its price rises, so do the costs of most products consumers buy.

-- Ronald D. White

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