The wholesale price of gasoline ranged from $4 to nearly $5 a gallon in the U.S. Gulf Coast throughout the day on Thursday, said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J.
That was up significantly from about $3 to $3.30 a gallon on Wednesday, Kloza said, and the surge drove up wholesale prices in other U.S. regions, too.
"We're looking at the highest wholesale prices ever for a huge swath of the country," he said. "People understand that regardless of what happens with Ike, it's going to shut down the biggest refining cluster for a period of five, six, seven days."
Wholesale prices are what refineries charge retailers. Retailers then mark up those prices for the customer to make a profit - so if these wholesale prices hold, it could mean that pump prices for U.S. drivers easily break through the July 17 record of $4.114 a gallon.
How fast those prices would hit the pump would depend on disruptions, if any, caused by Hurricane Ike.
The average U.S. retail price for regular gasoline was at $3.671 Thursday, according to the Oil Price Information Service, auto club AAA and Wright Express. Gasoline remains above $4 a gallon in just a few areas of the country, including Alaska, Hawaii, San Francisco and Chicago.
The market's renewed storm worries arrive a day after the U.S. Energy Department reported a larger-than-expected drop in crude and gasoline inventories, and OPEC decided to cut excess production by about half a million barrels a day.
October gasoline futures rose 8.72 cents to settle at $2.7488 a gallon on the New York Mercantile Exchange.
But despite the heightening anxiety about Ike, funds continued to liquidate their crude investments, anticipating a slower global economy and a stronger U.S. dollar.
Light, sweet crude for October delivery on the Nymex fell $1.71 to settle at $100.87 a barrel - the lowest close since March 24.
During trading, the contract dropped as low as $100.10 a barrel. The last time crude traded below $100 was April 2, and the last time it closed below that level was March 4.
"It's a strange, strange world here," Kloza said. "You might see an extraordinary thing - you may see crude oil less than $100 and retail gasoline more than $4 a gallon."
Ike, following last week's Hurricane Gustav, was expected to blow ashore early Saturday somewhere between Corpus Christi and Houston. Some forecasters predict it will strengthen from a Category 2 storm, with winds near 100 mph, to a Category 4. Ike ripped through Cuba and killed at least 80 people in the Caribbean.
Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity. Most are clustered along the Gulf Coast near such cities as Houston, Port Arthur and Corpus Christi. Exxon Mobil Corp.'s plant in Baytown, outside Houston, is the nation's largest refinery.
Refineries are built to withstand high winds, but flooding can disrupt operations and - as happened in Louisiana after Gustav - power outages can shut down equipment for days or weeks.
The big question, however, is whether a possible disruption in gasoline distribution - not to mention the slow economy - would crimp demand and drive gasoline prices back down again.
"This could end up looking just like Katrina, whereby prices spiked substantially and came down just as hard," said Linda Rafield, senior oil analyst for Platts, the energy research arm of McGraw-Hill Cos.
When Hurricanes Katrina and Rita scoured the Gulf Coast in 2005, she said, "the U.S. economy was in the mature phase of a business expansion." Now, the economy is slowing, so demand could suffer even more.
The Energy Department recently reported that in June, U.S. demand for oil products was down 1.17 million barrels a day, or 5.6 percent, from the same time last year. That slowdown - along with weak economies in other developed nations and a strengthening dollar - has sent crude prices down about 30 percent from their record above $147 a barrel on July 11.
The Organization of Petroleum Exporting Countries responded to falling crude prices and waning demand Wednesday by reducing output by 520,000 barrels a day.
"OPEC was trying to slow this steep decline," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "But we're in a bearish trend right now and I still expect the price to fall another $10."
Trader and analyst Stephen Schork suggested prices could fall even lower, to $75, "which is exactly where oil was last September."
The Energy Department's Energy Information Administration said Wednesday that crude inventories fell 5.9 million barrels last week from the previous week, and that gasoline inventories fell 6.5 million barrels. Inventories of distillates - which include heating oil and diesel fuel - fell 1.2 million barrels.
In Nymex trading, heating oil futures rose 1.31 cent to settle at $2.9155 a gallon.
Natural gas fell 14.5 cents to settle at $7.248 per 1,000 cubic feet. The EIA said Thursday that natural gas in U.S. storage rose last week.
CME Group, parent of the New York Mercantile Exchange, will open energy trading on the CME Globex and ClearPort platforms earlier than usual Sunday at 10:00 a.m. Eastern time due to the hurricane.
In London, Brent crude on the ICE Futures exchange fell $1.33 to $97.64 a barrel.
Associated Press Writers Alex Kennedy in Singapore and George Jahn in Vienna contributed to this report.