Oil and gasoline related exchange traded funds (ETFs) have been steadily rising as energy prices are reaching ever higher levels.

Oil prices are trading at the highest levels since September 2008, comments Chris Kahn for Yahoo! Finance. Prices climbed this week to $106 per barrel, after the Energy Department reported gasoline consumption is growing and a bomb explosion in Jerusalem. [ETFs Ended Flat On Profit Taking, Rising Oil Prices.]

Meanwhile, oil traders are still keeping an eye on the demonstrations and possible revolutionary actions in North Africa and the Middle East – the area supplies about 27% of global oil. Oil prices have surged 25% since the demonstrations broke out in the region. [How Geopolotical Risk Is Affecting Oil ETFs.]

Despite rising gas prices, motorists have yet to cut back, but economists believe that pump prices will soon reach a point where consumers will start to reduce their demand. If gas demand drops, consumer spending in other areas may also decline, since motorists aren’t getting around as much, and businesses will suffer.

The Energy Information Administration calculates that average gasoline consumption is up 1.2% year-over-year, with a steady increase in each of the past five weeks year-over-year. Gasoline supplies have diminished by 5.3 million barrels, or more than twice as much as projected.

The price of oil experienced a minor slowdown after the massive quake crippled Japan, but Japan’s oil demand is expected to bounce back, giving a bit of support for oil prices.

  • United States Oil (NYSEArca: USO)
  • PowerShares DB Oil Fund (NYSEArca: DBO)
  • US Commodity Brent Oil Fund (NYSEArca: BNO)
  • United States Gasoline ETF (NYSEArca: UGA)

For more information on oil, visit our oil category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.