Update: Oil prices rise to $138 a barrel

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Oil prices spiked sharply today, closing at $138.54, according to this report on latimes.com, which quotes a gas station owner predicting a 10-cent rise in gas prices later today:

‘I’m expecting a 10-cent increase for my gasoline from Shell today,’ said Andre Van der Valk, who operates two Shell-brand stations and was selling regular for $4.49 a gallon. ‘From the consumer end of it, it’s a killer.’

Here’s the A.P. from earlier in the day: ‘Oil prices shot up more than $10 to a new record above $139 Friday after a major investment bank predicted a spike to $150 in the coming weeks and rising tensions in the Middle East left investors uneasy about supply.’

The connection to housing? Our region is built on many assumptions, one of them being the expectation that people here can travel easily and cheaply across vast distances without using mass transportation. I don’t know of too many people who penciled out a budget that includes the cost of gas at $5/gallon, or higher. If oil prices hold at these levels it is a sucker punch to this region’s economy, and by extension, to the housing market.

One more thought: The gas price pictured above, in Santa Monica on Thursday, does not reflect the $139-per-barrel price. This latest spike in oil prices hasn’t hit us yet.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Pain at the Pump gallery on Your Scene at latimes.com.