Before Monday, the April 1980 price of $38 was the pinnacle, fueled by dramatic Mideast events including the failed rescue of American hostages in Iran. Adjusted for inflation, that $38 is now more than $103. This time, rather than a political crisis, the main culprit is decidedly less spectacular: a weak dollar.
For consumers and the nation's economy, triple-digit oil prices are being felt broadly, boosting costs from the gas pump to the grocery store and crimping sales of light trucks, tires and pleasure tours.
"These are desperate times," said Diana Rodriguez, a 36-year-old social worker from Los Angeles whose commute to Culver City and to clients' homes eats up a big chunk of her budget. Lately, she has had to limit herself at the supermarket, buying just one gallon of milk instead of two and denying her four children ice cream.
"The only thing to do is to use less gas, and go fewer places, but it's really hard on all of us," Rodriguez said while she pumped gas Monday at a Chevron station in Lincoln Heights. She paid $50 to put 14 gallons in the small 2007 Kia Rondo that she borrowed from her mother for the day to give her gas-guzzling truck -- and her wallet -- a break.
Even though the peak driving season is still months away, government figures showed the average cost of self-serve regular in California was $3.459 a gallon Monday, up 13.1 cents during the last week and less than a penny shy of the state's peak price of $3.461 a gallon hit in May.
Nationwide, the average pump price rose 3.2 cents in a week to $3.162 a gallon Monday. Diesel prices, meanwhile, set record-high averages nationwide and in California, jumping to $3.658 a gallon and $3.803 a gallon, respectively.
Now the big question is, how high can oil and fuel prices go.
The answer may turn on moves by the Organization of the Petroleum Exporting Countries, which meets Wednesday to discuss whether to cut the cartel's oil production or hold it steady.
"If people don't like what OPEC has to say, probably $110 will be the next objective before the market exhausts itself," said Tom Hartmann, a broker and analyst at Altavest Worldwide Trading Inc., based in Mission Viejo.
These days, however, many oil analysts are more intent on watching the U.S. Federal Reserve, which can affect the value of the dollar by raising or lowering interest rates.
"I don't think it's a coincidence that the price of oil hits an all-time high around the time that the dollar hits an all-time low against the euro," said Ken Medlock, an energy studies fellow at Rice University's Baker Institute. "The amount of dollars you have to give up for a barrel of oil is going to increase because the dollar is purchasing less and less."
Daniel Yergin, chairman of Cambridge Energy Research Associates, said the oil-price gusher "has more to do with the turmoil in the credit markets and the weak dollar than it does with the flow of oil in and out of refineries."
"This time the cause and effect isn't the fall of the shah of Iran," said Yergin, author of "The Prize," a Pulitzer Prize-winning history of oil. Instead of OPEC, oil companies such as Exxon Mobil Corp., Venezuelan leader Hugo Chavez or even the supply and demand for oil, Yergin said, "the people who are driving this bus are in the financial markets."
Some say oil is riding a speculative bubble that could pop soon because the price isn't supported by market fundamentals.
"If you look at supply and demand, we probably should not be over $100," Hartmann said. "We are well supplied right now."
Oil's latest surge started with the collapse of home values and the market for sub-prime loans, which helped borrowers with poor credit buy houses that were beyond their means. Sub-prime lenders faltered, and the crisis quickly spread to other financial markets.
The Federal Reserve started cutting interest rates to spur investment, bring relief to homeowners with adjustable-rate mortgages and stave off recession. As a consequence of the Fed's actions, the value of the dollar fell further against the euro, prompting investors to shift their money into oil and other commodities and away from the dollar and the stock market.
Along the way, the threat of disruptions to overseas oil production gave traders even more reasons to bid oil higher.