High gasoline prices feed economic uncertainty: Bush

By Chris Baltimore

WASHINGTON (Reuters) - President George W. Bush on Thursday said high gasoline prices were stoking uncertainty over the direction of the U.S. economy as crude oil prices surpassed records set during the oil shocks of 1979-1980.

"That creates a lot of uncertainty," Bush said at a news conference, referring to gasoline prices. "If you're out there wondering what your life is going to be like and you're looking at $4 a gallon, that's uncertain."

Some analysts have said U.S. gasoline could hit $4 a gallon this summer, but Bush did not say whether he agreed.

Hours later, U.S. crude oil prices hit a new all-time peak of $102.74 a barrel, beating the previous inflation-adjusted high of $102.53 struck in 1980 as tracked by the International Energy Agency.

In real terms, crude oil prices are now higher than they have ever been.

Driven by record weakness in the U.S. dollar, as well as a rally in commodities across the board, U.S. crude oil futures prices on Thursday surpassed levels set during the price shocks of 1978-1980, when oil prices doubled due to a revolution in Iran and an ensuing drop in the OPEC member's oil output.

U.S. gasoline prices have shot up 17 cents in the past two weeks to a national average of $3.10 a gallon, as record crude oil prices above $100 a barrel trickled through the refining system to the pump.

High energy prices are another factor weighing on the U.S. economy, which is teetering on the edge of recession.