Oil futures shot higher Tuesday, closing above $100 for the first time as investors bet that crude prices will keep climbing despite evidence of plentiful supplies and falling demand. At the pump, gas prices rose further above $3 a gallon. 

There was no single driver behind oil's sharp price jump; investors seized on an explosion at a 67,000 barrel per day refinery in Texas, the falling dollar, the possibility that OPEC may cut production next month, the threat of new violence in Nigeria and continuing tensions between the U.S. and Venezuela. 

The fact that there was no overriding reason for such a price spike could be a bad omen for consumers already bearing the burdens of high heating costs and falling real estate values. Many recent forecasts have said oil demand growth this year will be less than initially expected, yet prices continue to rise. That suggests they may continue rising as the weakening dollar attracts new investors to the futures market. 

And rising oil prices mean higher gas prices. 

''As the economy weakens, it's going to be met with $3.50 and $3.60 gasoline,'' said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. ''And that really spells trouble for the consumer.''  

The U.S. dollar dropped 5 percent versus the euro since the Fed started to cut interest rates on Sept. 18. The U.S. central bank has slashed its target for overnight lending between banks by 2.25 percentage points since September to 3 percent as the housing slump deepened. The dollar fell to an all-time low of $1.4967 per euro on Nov. 23.  

``The longer the . . .  Fed cuts, the bigger the chance the dollar will fall to new lows,'' said Boris Schlossberg, senior currency strategist in New York at currency dealer DailyFX.com. ``We're seeing more anti-dollar sentiments emerging. People are worrying about the ability of the U.S. financial sector to stay financed.''

By letting the dollar continue to weaken, the Bush administration is making another in its long series of huge, avoidable mistakes.

It is an administration that . . . has been utterly incompetent, not to mention bullheaded in ignoring important data and empirical evidence, on far too many fronts. . . .

ALL THIS IS RELEVANT because it shows an administration that, no matter how high its ideals, has been repeatedly asleep at the switch. And so it is again with regard to the free-falling dollar. Other experts (here, here, here, and here, among many others) have explained and will continue to explain the details of what is now a crisis in the dollar's value. . . .

[T]he administration has been sending signals from day one that it actually prefers a weaker dollar, beginning when then-Treasury Secretary Paul O'Neill noted that a "strong dollar" meant little in policy terms. O'Neill's successor at Treasury, John Snow, continued with the message by asking at a G-8 meeting in France, "What's wrong with a weak dollar?" Now, though, even French President Nicolas Sarkozy is warning that a weak dollar is a threat to world economic stability -- and even supermodels are sounding the alarm.

Unless the dollar's decline is stopped by strong words and concrete actions, and soon, the American economy is in serious danger of sliding into the sort of stagflation -- stagnation plus inflation -- that rocked the nation throughout most of the 1970s.

The billionaire and potential independent presidential candidate also said the nation "has a balance sheet that's starting to look more and more like a third-world country." 

Consumer confidence slid to its lowest level in 16 years, factory output went flat and there were signs of a pick-up in inflation, according to data released Friday -- an ominous combination for an economy on the verge of recession. . . .  

The more immediate concern is growth, or a lack of growth, in economic activity. Because spending by individual Americans accounts for two-thirds of that activity, economists are eager to learn how confident consumers are feeling, which may signal whether they are in a buying mood or are pulling in their horns. 

In a clearly downbeat sign, the Reuters/University of Michigan index of consumer sentiment this month fell much more than expected to its lowest level since February 1992. 

Meanwhile, the government's report on industrial production in January showed a weak 0.1% increase for the second consecutive month. And an index of manufacturing activity in New York state signaled contraction for the first time since May 2005, according to the Federal Reserve Bank of New York. 

"We've started 2008 with very little momentum, if any," said Alan Gayle, chief investment strategist at Trusco Capital Management in Atlanta. . . .  

Complicating the problem, U.S. import prices skyrocketed last month from December because of higher energy and food costs, and marked a record increase from a year earlier, the Labor Department said Friday. That, along with signs in the consumer survey that Americans are starting to worry about higher prices, is bad news for the Fed, which is trying to quash recession and a freeze-up of financial markets by slashing interest rates, the very thing that can send prices flying. 

In congressional testimony Thursday, Fed Chairman Ben S. Bernanke said that inflation, though running above levels of a year ago, remained in check. But he acknowledged that if inflation or people's expectations about inflation picked up, that eventually could make it harder to trim interest rates.

In his letter to U.S. District Judge Susan Dlott of Cincinnati, Assistant Attorney General Alex Acosta argued that it would "undermine" the enforcement of state and federal election laws if citizens could not challenge voters’ credentials. 

Former Justice Department civil rights officials and election watchdog groups charge that his letter sided with Republicans engaging in an illegal, racially motivated tactic known as "vote-caging" in a state that would be pivotal in delivering President Bush a second term in the White House. 

Acosta’s letter is among a host of allegedly partisan Justice Department voting rights positions that could draw scrutiny on Capitol Hill in the coming weeks as congressional Democrats expand investigations sparked by the firing of at least nine U.S. attorneys. . . .

Robert Kengle, former deputy chief of the department’s Voting Rights Section who served under Acosta, said the letter amounted to "cheerleading for the Republican defendants."

"It was doubly outrageous," he said, "because the allegation in the litigation was that these were overwhelmingly African-American voters that were on the challenge list." 

Joseph Rich, a former chief of the department's Voting Rights Section, called the Ohio scheme "vote caging." . . .  

Federal courts and Ohio Secretary of State Kenneth Blackwell ultimately barred Republicans from posing the challenges in a frenzied legal battle that ran up to election eve. 

The House Judiciary Committee plans soon to begin examining whether the Civil Rights Division took positions in support of a Republican agenda to suppress the votes of poor and elderly minorities who tend to vote for Democrats, said an aide to the panel who requested anonymity because the new line of inquiry has yet to be announced officially.