Oil tops $105 a barrel, a level last reached in Sept. 2008

NEW YORK - Oil prices continued to set post-recession highs Monday as forces loyal to Moammar Gadhafi pounded rebels near a key oil port in Libya. It is unclear how long the country's oil exports will be cut off, and traders prepared for a worst-case scenario in which world supplies would be under pressure for months.

Benchmark West Texas Intermediate crude for April delivery gained $1.02 to settle at $105.44 a barrel on the New York Mercantile Exchange. The last time crude oil was that high was in early September 2008, just before the collpase of Lehman Bros. Holdings Inc. brought much of the world economy to its knees.

On Monday, the price nearly hit $107 a barrel during early electronic trading.

The rise in oil is driving U.S. gasoline prices to levels that were not expected for at least another month. Pump prices have jumped an average of 39 cents a gallon nationwide since the Libyan uprising began in mid-February, forcing motorists to pay an additional $146 million a day for fuel. The national average hit $3.509 per gallon Monday, according to AAA, Wright Express, and Oil Price Information Service.

Libya, which sits on the largest oil reserves in Africa, has been engulfed in a four-week rebellion as militants try to oust Gadhafi after 41 years in power. Officials in the country say oil fields continue to operate, but daily exports of 1.5 million barrels could be cut off for some time.

OPEC has ramped up production to make up for the loss of Libyan crude. The Financial Times reported Monday that Saudi Arabia, Kuwait, the United Arab Emirates, and Nigeria are planning to put an additional 1 million barrels a day on the market.

Also, the Obama administration said Monday that it was evaluating whether to tap U.S. strategic oil reserves to slow the increasing price of oil. A White House spokesman said officials would base that decision on a variety of factors, including the flow of oil to the United States.

The government started to stockpile oil after the 1973 Arab embargo. The Strategic Petroleum Reserve, located in massive underground salt deposits in Texas and Louisiana, holds 727 million barrels of oil - enough to supply the nation for 37 days.

But analyst and trader Stephen Schork said it did not make sense to tap into the U.S. reserves right now because the supply problem exists mostly in Europe, where many refineries rely on Libyan crude. In contrast, U.S. refineries have access to a relatively large supply.