NEW YORK (AP) — Oil surged above US$112 a barrel in New York Friday and Brent topped US$126 following a drop in the dollar and continued jitters about shipments from the world’s major oil suppliers.

Benchmark West Texas Intermediate for May delivery jumped US$2.49, or 2.3 per cent, to settle at US$112.79 per barrel on the New York Mercantile Exchange. Crude oil set new 30-month highs almost every day this week.

In London, Brent crude rose US$3.86 to settle at US$126.12 on the ICE Futures exchange.

Oil moved higher as the dollar plunged against other major currencies. Oil is traded in dollars and tends to rise when the greenback falls and makes crude cheaper for investors holding foreign currency. The looming shutdown of the federal government threatened to weaken the dollar further and encouraged more buying, according to analysts.

Oil also climbed on fears that violence in Nigeria ahead of the country’s national election this weekend could lead to supply interruptions. And in Venezuela a massive blackout appears to have affected some refineries, analysts said. The two countries supply a combined 2 million barrels of oil per day to the US

If crude prices keep rising, experts say, gasoline prices could hit US$4 a gallon (US$1.05 a litre) across the US this summer.

Pump prices have jumped from US$3.07 to US$3.74 per gallon since the beginning of the year. The swift rise forced the Oil Price Information Service to boost its retail gasoline price forecast to a range of US$3.75 to US$4 per gallon this year. OPIS chief oil analyst, Tom Kloza said it may not be long before the national average tests the all-time record of US$4.11 per gallon set in July 2008.

Further price hikes could do serious damage to the US economy, he said. For consumers, “gas prices have more relevance on an emotional level than a lot of other things that they pay for,” Kloza said. “People pay more attention to gasoline than phone service, cable TV or other services,” Kloza said.

Oil and gasoline prices began a steady rise in February, as the Libyan rebellion shut down the country’s daily exports of 1.5 million barrels of oil. Libya produces about two per cent of world demand, and analysts say making up for those losses will severely reduce the ability of other oil-producing countries to increase production in the future. Saudi Arabia and other OPEC countries are covering some of the shortfall in Libyan crude, which went mainly to refineries in Europe.

Barclays Capital has said that Libya’s oil exports probably will be offline for several months. As fighting continues more traders are going along with that prediction.

“The market is being forced to consider a possible major loss of Libyan barrels probably through the rest of this year and into next,” analyst Jim Ritterbusch said Friday.

Experts point to other factors that have pushed oil and gasoline to record levels. The US economy added hundreds of thousands of jobs this year. That means gasoline demand could increase this year as more workers join the daily commute. And last month’s devastating earthquake and tsunami in Japan put further pressure on oil prices. Japan is expected to boost oil and natural gas imports while some of its nuclear power plants are offline.