CBNNews.com - NEW YORK - The Dow Jones industrials plunge 400 after oil prices approached $140.
Oil prices shot up more than $11 Friday to a new record above $139. Experts predict the unprecedented jump will drive gas prices well past the $4 mark in the coming weeks.
The sharp increase, more than 8 percent higher in a single day - also raised the prospect of accelerating inflation by adding to already strained transportation costs.
Stocks tumbled with those looming uncertainties, taking the Dow Jones industrials down more than 400 points.
Traders also zeroed in on remarks by an Israeli Cabinet minister, who was quoted as saying his country will attack Iran if it doesn't abandon its nuclear program.
Transportation Minister Shaul Mofaz added that Iranian President Mahmoud Ahmadinejad "will disappear before Israel does," the Yediot Ahronot daily reported.
Iran is the second-biggest producer in the Organization of Petroleum Exporting Countries. Traders worry that any conflict with Israel could disrupt global supplies.
A further weakening of the dollar also helped send oil prices higher by enticing overseas buyers armed with stronger currencies.
Meanwhile, U.S. gas prices at the pump continued to hover just shy of an average $4 a gallon, easing only 0.3 cent from Thursday's record.
Drivers are now paying an average of $3.99 for a gallon of regular gas nationwide, according to AAA and the Oil Price Information Service.
In many parts of the country, consumers are already paying well over $4.
Pump prices are bound to rise even further if oil sustains its advance.
Many traders buy commodities such as oil as a hedge against inflation when the dollar is falling. A weaker dollar makes oil cheaper for investors dealing in other currencies.
Analysts believe the dollar's protracted decline has been a major reason why oil prices have nearly doubled in the past year.
Compiled from Associated Press reports.