NEW YORK (CNNMoney) -- Crude oil prices moved above $106 a barrel again Thursday before retreating, as a confluence of war, natural disasters and Japan's nuclear problems unnerved investors.
The benchmark U.S. contract, West Texas Intermediate, dropped 15 cents, or 0.55%, to settle at $105.60 a barrel for May delivery. In early trading, the price peaked at $106.69.
Brent crude, pegged to oil prices in the North Sea, rose 4 cents to $115.59.
U.S. oil prices have surged more than 20% since mid-February, when pro-democracy movements reached Libya, Africa's third-largest oil producer.
Libya is just the start of the worries. A bomb exploded on a Jerusalem bus Wednesday. Escalating violence between Syrian security forces and anti-government protesters left 15 dead. The governments of Bahrain, Tunisia, Yemen and Egypt are all in various stages of disarray. Portugal's debt crisis continues unabated.
"The truth is we have very strong fundamental justification for where the price of oil is at and where it is probably going," Phil Flynn, senior market analyst at PFG Best, wrote in a research note.
Prices could be going much higher.
If all oil production ceased in Libya, Bahrain and Yemen, oil prices could rise to $125 a barrel, according to Moody's Analytics economist Chris Lafakis. If Iran reduced production by 50%, prices could rise to $150.
One mitigating factor is the reduced demand in Japan after the twin natural disasters that rocked the country earlier this month.
With business shuttered and manufacturing plants closed, the country is using less oil. For the moment, that's actually a helpful phenomenon for world oil markets struggling with reduced exports from Libya.
For Japan, the temporary drop in demand coincides with a diminished refining capacity. The earthquake and tsunami damaged a number of Japanese oil refineries, sparking concerns about whether Japan would need to import refined products.
Three of the four refineries operated by Cosmo Oil are online, and ramping up production. However, the company's largest refinery, located north of Tokyo in Chiba, is still offline.
In the longer term, experts expect Japanese demand for oil to spike as the country starts reconstruction efforts, especially with a nuclear capacity reduced by the quake damage at the Fukushima plant.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.81%||3.81%|
|15 yr fixed||3.01%||3.03%|
|30 yr refi||3.78%||3.79%|
|15 yr refi||3.00%||3.01%|
Today's featured rates:
Boeing said Thursday that it's cutting about 200 jobs at its Dreamliner plant in South Carolina. More
On coal, Carrier, autos and the economy overall, the facts dispute Trump's jobs claims. More
Mark Zuckerberg explains why Facebook is moving on from just friendships to community building. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Though your financial chemistry may not be what's lighting you up right now, one of the most important things you can do as a new couple is to get to know each other money-wise. More