NEW YORK (Reuters) – When U.S. gasoline prices shot to $4 a gallon in 2008, sticker shock cut fuel demand and helped send world oil prices tumbling by more than $100 a barrel in just five months.

Pump prices have returned to near those highs, averaging $3.95 a gallon after rising 36 percent in a year. Oil has also soared, with Brent trading above $122 a barrel.

But this time, there are ample reasons to suspect $4 U.S. gasoline won’t slash demand or trigger another oil price rout.

Outrage over prices among American drivers, who consume an eighth of the world’s oil, is turning into resignation with summer driving season around the corner. Motorists may bristle, and alarm over fuel costs is growing in Washington, but experts say the tipping point at which prices would slash demand has likely risen sharply since 2008.

“In 2008, $4 gasoline prices seemed so high they were almost inconceivable. They won’t be viewed the same way this time,” said Lars Perner, a consumer behavior expert at the University of Southern California, who has written about fuel.

“Back then, the price at which demand fell off sharply was around $4. Today, the price may be $5.”

Beyond the deja vu factor, several other market shifts make a demand collapse less likely. Although new cars are becoming more fuel efficient, fewer Americans are buying them, and the average age of a U.S. passenger vehicle is 10 years.

NEW YORK (Reuters) – Oil rose on Friday, with Brent crude surging past $123 a barrel, as improving U.S. consumer confidence and industrial production eased concerns about rising fuel costs.

Concerns about the impact of surging fuel on the economic recovery and cons hit prices earlier in the week, knocking Brent off 32-month highs. It had risen over $126 a barrel on expectations the conflict in Libya would lead to a prolonged disruption of the OPEC nation’s supplies.

A U.S. government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected. Investors have been concerned higher energy and food costs would slow consumer spending.

A gauge of manufacturing in economic powerhouse New York State rose in April to the highest level in a year and employment improved, the New York Federal Reserve said Friday.

U.S. crude futures for May traded up $1.43 to $109.54 a barrel by 1:27 p.m. EDT (18:27 GMT), marking the contract’s third straight day of gains. ICE Brent crude for June, the new front-month contract, rose $1.50 to $123.50 a barrel.

“Consumer confidence and supportive Empire State manufacturing data helped turn the market more positive and China’s growth, while slightly slower, is still chugging along,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

China’s gross domestic product grew by 9.7 percent in the first quarter from a year earlier, off the 9.8 percent growth rate in the last quarter of 2010 but ahead of the 9.5 percent pace that analysts had expected.

NEW YORK/LONDON (Reuters) – Oil prices will soar above $130 a barrel by late 2011, a new Reuters poll found, and one in five traders said they expected oil to hit $150 this year, levels some economists say could trigger recession.

With no end in sight to the unrest in the Middle East and North Africa, the majority of the 32 major oil traders, bank analysts and hedge fund managers surveyed by Reuters since Monday said they expect oil prices to resume their climb later

this year after a short-term retreat.

Brent futures, a global benchmark oil contract, has risen almost $8 over the past five days to settle at $122.30 on Wednesday. They have jumped above $120 a barrel this week for the first time since 2008.

World oil prices in the $130-$150 range ring alarm bells for macroeconomic forecasters.

“It would be devastating, I would think,” said Yelena Shulyatyeva, BNP Paribas. Her growth forecasts are based on oil at $110 a barrel.

“If we see something like $130, that would definitely hit confidence, and consequently consumer spending will be hit even more than in our forecast.”

NEW YORK/LONDON (Reuters) – Oil prices will soar above $130 a barrel by late 2011, a new Reuters poll found, and one in five traders said they expected oil to hit $150 this year, levels some economists say could trigger recession.

With no end in sight to the unrest in the Middle East and North Africa, the majority of the 32 major oil traders, bank analysts and hedge fund managers surveyed by Reuters since Monday said they expect oil prices to resume their climb later this year after a short-term retreat.

Brent futures, a global benchmark oil contract, has risen almost $8 over the past five days to settle at $122.30 on Wednesday. Brent futures jumped above $120 a barrel this week for the first time since 2008, while Brent’s spot price topped $124 on Wednesday.

World oil prices in the $130-$150 range are cited by economic forecasters as levels that would sap consumer spending and threaten a fragile global economic recovery.

In the Reuters poll, almost two-thirds said they expect a short-term correction from today’s level, saying Brent will fall to below $120 by the end of June, and one expected it to drop below $100 a barrel. But any decline would be temporary, most respondents said.

“There are a lot of uncertainties in the market right now,” said Fadel Gheit, managing director at Oppenheimer & Co in New York.

Gheit forecast prices wouldn’t rise above $125 this quarter, but could hit $135 near the end of the year.

NEW YORK/LONDON (Reuters) – Brent oil’s four-day rally above $120 a barrel will soon fizzle out, a majority of traders and analysts say. But it will roar back above $130 a barrel in the second half of this year, with no end in sight to the unrest in the Middle East and North Africa.

That’s the scenario most commonly foreseen by 32 major oil traders, bank analysts and hedge fund managers surveyed by Reuters since Monday in a poll launched after Brent jumped above $120 a barrel for the first time since 2008, rising almost $8 over the past five days.

Almost two-thirds of those polled said Brent will soon fall back to trade below $120 by the end of June, with some calling for prices to drop toward $100 by the end of the quarter. But any correction is likely to be short-lived.

“There are a lot of uncertainties in the market right now,” said Fadel Gheit, managing director at Oppenheimer & Co in New York.

Gheit forecast prices wouldn’t rise above $125 this quarter, but could hit $135 near the end of the year.

“Global tensions are likely to support oil for now, but in time prices above $120 for Brent and $100 for WTI will undoubtedly slow global economic growth.”

Traders said the rally is starting to look overdone. With the loss of Libyan output now priced into the market, investors are increasingly wary of chasing prices higher. No clear threat to other Middle East supplies is on the immediate horizon despite simmering unrest in the region. Only three of those surveyed expect prices to top $130 this quarter.

NEW YORK/LONDON (Reuters) – Brent’s four-day rally above $120 (73.79 pounds) a barrel will soon fizzle out, a majority of traders and analysts say. But it will roar back above $130 a barrel in the second half of this year, with no end in sight to the unrest in the Middle East and North Africa.

That’s the scenario most commonly foreseen by 32 major oil traders, bank analysts and hedge fund managers surveyed by Reuters since Monday in a poll launched after Brent jumped by above $120 a barrel for the first time since 2008, rising almost $8 over the past five days.

Almost two-thirds of those polled said Brent will soon fall back to trade below $120 by the end of June, with some calling for prices to fall back towards $100 by the end of the quarter. But any correction is likely to be short-lived.

“There are a lot of uncertainties in the market right now,” said Fadel Gheit, managing director at Oppenheimer & Co in New York.

Gheit forecast prices wouldn’t rise above $125 this quarter, but could hit $135 near the end of the year.

“Global tensions are likely to support oil for now, but in time prices above $120 for Brent and $100 for WTI will undoubtedly slow global economic growth.”

Traders said the rally is starting to look overdone. With the loss of Libyan output now priced into the market, investors are increasingly wary of chasing prices higher. No clear threat to other Middle East supplies are on the immediate horizon despite simmering unrest in the region. Only three of those surveyed expect prices to top $130 this quarter.

NEW YORK/LONDON (Reuters) – Brent’s four-day rally to above $120 a barrel will soon fizzle out, a majority of traders and analysts say. But it will roar back above $130 a barrel in the second half of this year with no end in sight for unrest in the Middle East.

That’s the scenario most commonly foreseen by 32 major oil traders, bank analysts and hedge fund managers surveyed by Reuters since Monday, in a poll launched after Brent jumped by $7 in just four sessions to hit a 2-1/2-year high.

Almost two-thirds of those polled said Brent will soon fall back to trade below $120 by the end of June, with some calling for prices to fall back toward $100 by the end of the quarter. But any correction is likely to be short-lived.

“There are a lot of uncertainties in the market right now,” said Fadel Gheit, managing director at Oppenheimer & Co. in New York.

Gheit forecast prices wouldn’t rise above $125 in this quarter, but could hit $135 near the end of the year.

“Global tensions are likely to support oil for now, but in time prices above $120 for Brent and $100 for WTI will undoubtedly slow global economic growth.”

Traders said the rally is starting to look overdone, with the loss of Libyan output now priced into the market, investors increasingly wary of chasing prices higher and no clear threat to other Middle East supplies on the immediate horizon, despite simmering unrest in the region. Only three of those surveyed expect prices to top $130 this quarter.

NEW YORK (Reuters) – This week when President Barack Obama touted an initiative to slash U.S. oil imports by a third by 2020, he gave a major nod to a billionaire financier who could be central to the plans.

T. Boone Pickens, 82, a Texas hedge fund manager and former corporate raider who made his billions in the U.S. oil patch, is now a leading evangelist for U.S. natural gas.

He claims the Pickens Plan, a lavishly marketed campaign launched in 2008, which earlier failed to gain support in Washington, would cut 2.5 million barrels a day from U.S. oil imports by converting the country’s heavy vehicle fleet from diesel to natural gas.

“We need to get off OPEC and use our own supplies, so I’m very, very encouraged by the president’s speech,” Pickens said in a phone interview. “Natural gas could be the way to do it.”

With a new bill encouraging the use of natural gas in U.S. vehicles about to make its way through Congress and U.S.-produced natural gas trading at record discounts to soaring crude oil prices, the time could be ripe for Pickens’ grand plans to prosper.

“Gas is domestically produced and currently one-fourth the price of oil: it’s a no brainer that people will look for ways to push out oil and use more gas,” said Nikos Tsafos, senior analyst at PFC Energy in Washington.

While Obama is not calling for U.S. natural gas to supplant the entire 3.6 million barrels of oil imports he aims to cut by 2020, the potential cost savings from switching to gas are becoming too big to ignore.

NEW YORK/ABU DHABI (Reuters) – Saudi Arabia’s plans to expand its drilling rig count by 28 percent signal a rush to deliver the 12.5 million barrels a day (bpd) of capacity that Riyadh has long claimed is in place.

Two Saudi officials told Reuters on Tuesday that the extra rig activity would maintain rather than increase the kingdom’s oil capacity. It completed a multi-year expansion in 2009 meant to boost spare capacity by more than 3 million barrels per day.

“It’s not to expand capacity. It’s to sustain current capacity on new fields and old fields that have been bottled up,” one of the officials said.

State-run oil giant Saudi Aramco met leading oil service companies including Halliburton (HAL.N: Quote, Profile, Research, Stock Buzz) over the weekend to discuss plans to boost the country’s rig count this year and next to 118, from around 92 now, Simmons & Co analyst Bill Herbert said on Monday.

Saudi Arabia increased its output to around 9 million bpd this month to help compensate for disruption of supply from fellow OPEC producer Libya.

Higher oil prices set off by recent political unrest in the Middle East and surging demand for crude in the developing world are spurring increased activity in the Saudi oil patch.

Brent crude traded above $115 a barrel on Tuesday and has risen 22 percent this year.

NEW YORK, March 28 (Reuters) – Saudi Arabia, the world’s top oil exporter, has unexpectedly called on top oilfield service companies to help quickly boost the country’s oil rig count by 30 percent to expand production capacity, Simmons & Co analyst Bill Herbert said on Monday.

Saudi state-run oil giant Aramco met with leading oil service companies, including Halliburton (HAL.N: Quote, Profile, Research, Stock Buzz), over the weekend to announce ambitious plans to increase its rig count, Herbert wrote in a research note.

It was not immediately clear whether Saudi Arabia was seeking more rigs to increase its idle spare production capacity beyond an estimated 3 million barrels per day currently, or simply ensure it can maintain the extra pumping power to meet any disruptions in international oil markets.

“Saudi Arabia has been expected to tread water on its production capacity, so this is unexpected,” Herbert said from Houston in a phone interview with Reuters.

“The risk premium in the Middle East has risen. Also, with Libyan production falling, Saudi Arabia may feel it has to be ready for higher production capacity.”

Aramco has stepped up production over the last several weeks to make up for a loss in Libyan output, but the Kingdom hasn’t released any plans to expand its overall capacity since completing a $100 billion plan to increase capacity by 3 million bpd to a “sustainable” 12 million bpd last year.

Herbert said Aramco wants to see the Saudi oil rig count soar to 118 from a current level around 92, while it’s “dusting off” a slow-going, $16 billion, 900,000-bpd oil project known as Manifa.