This was not a localized phenomenon (similar prices were seen all over), but as it turned out, the reaction was exactly the wrong one for reality. The Pacific rim demand was far more than the Clinton era agency postulated, and further, they failed to take into account development in India.
Gasoline was $0.87 on the East Coast, and everyone was thrilled with how cheap fuel was.
Domestic oil industry workers were out of work, many 20+ year hands left the oil patch for good after three bust cycles and spending the last of their savings to feed the family--again.
In the meantime, low prices caused many marginal wells to be plugged, wells which will not pay to reopen at $100/bbl., but which produced their 10-20 bbl per day, and in aggregate, were a significant source of domestic oil.
A regime change in Venezuela, coupled with a general strike in the oil industry there cut our supply (actually more oil was coming from Venezuela than Saudi Arabia). The 'shortage', if you will is accentuated by the Chinese buying up oil properties all over, especially in Canada, which is a major exporter to the US as well.
But the real problem, in terms of fuel prices, is the fact that no matter how much crude is available, it must be refined before you can use it, and there have been no new refineries built in the past 20 years in the US, while numerous refineries have been dismantled and shipped overseas or scrapped. Thank the environmnetalists for most of this, the NIMBY contingent gets the rest of the credit.
For those refineries which are in operation (currently at 98% capacity), there are all the different fuel formulations which must be catered to and additives to add, which further adds to the expense of production and makes shortages of a particular fuel entirely possible.
Significant contingents of Americans moving further from work in the last few decades have contributed to the problem as well. I remember "living in the sticks" and dad commuting 35 miles to work in the '60s in a little fiat air cooled roller skate so we could live there (I am glad he did) when no one else wanted to live "down there".
The supply of crude is not restricted, except by past economic factors and past/present environmental policies.
Demand is outstripping supply, on a global basis. Oil is a globally traded commodity, and price is not dependant on our policy alone.
Environmental and other lobbies have combined to restrict our ability to manufacture the petroleum products we use most. This has amounted to de facto manipulation of the available supplies, from an unanticipated (for many not in the industry) and non industry source.
While wartime speculation may cause some of the increase, this is only a small part of the price. The Clinton IEA blew it, plain and simple.
The rest is a synergistic combination of other factors.
For most people, this would not be a significant problem, if they were not leveraged to the hilt. With the era of cheap credit coming to a close, the crunch is on.
So I am waiting for a cheap SUV/1 ton pickup, and a nice outlying home for 20 cents on the dollar.