Oil prices jumped Wednesday despite a stronger dollar and signs that U.S. demand for oil is fading in light of a slow economy and record prices.
Oil fell about $3 early Wednesday, but rebounded after Morgan Stanley’s co-head of global economics, Richard Berner, said crude prices could reach $150 a barrel this year.
Light, sweet crude oil for July delivery rose $2.18 to settle at $131.03 on the N.Y Mercantile Exchange. The contract fell $3.34 Tuesday, and was roughly four dollars off its all-time high of $135.09 a barrel, which it hit late last week.
Usually, there is a boost in crude oil future purchases just before Memorial Day as traders anticipate a strong beginning to the summer driving season. But since forecasts by motorist group AAA expected less traveling this Memorial Day weekend, analysts have noted that lower demand for gasoline may be a result of the record gas prices.
The U.S. DOT said Monday that Americans drove 11 billion miles less in March ‘08 than last year, marking the first decrease in estimated March travel on public roads since 1979. That decline is the steepest year-to-year drop for any month in the history of the agency’s reporting, dating back to the early 40’s.
It’s finally starting to look like Americans are getting wise to the oil companies and are limiting their travel. I remember when I started driving that gas prices were in the 99 cents a gallon range. I remember the first time it cost me $20 to fill up my gas tank it completely ruined my day. Now I’m filling up the same car for $39.

I do believe that Americans can help reduce the cost of gas by showing the big oil companies that we can limit our usage thereby reducing demand. There are easy ways to do it that don’t require staying of the roads like “driving the speed limit” I know it’s tough for people to do but give yourself a little more time to get to work or wherever and you’ll notice an increase in gas mileage. Simple vehicle maintenance is another way to get better gas mileage. Regular oil changes, changing air filters, and adjusting tire pressure are all ways we can reverse the trend of rising gas prices.