WASHINGTON, June 8: Experts in the United States warned on Sunday that soaring oil prices could reach as high as $200 a barrel in next 18 months while the White House promised to take steps to protect the US economy from its negative effects.

“(We are) figuring out a way (to) increase the amount of domestic oil production and exploration … in environmentally sensitive ways,” said White House Press Secretary Dana Perino.

US Energy Secretary Samuel Bodman described the unprecedented rise in oil prices as “shocking” and warned that it may slow the global economy that the World Bank forecast in January would grow 3.3 per cent this year.

The promise to extract more oil from US soil, an otherwise unpopular proposition, followed the biggest ever single-day leap in oil prices on Friday. A nearly $11 jump piled atop an increase of almost $5.50 the day before and took oil futures more than 13 per cent higher in just two days. It was a new record on the New York Mercantile Exchange and dragged the Dow Jones industrials down nearly 400 points.

The spike in oil prices coincided with a dollar slump, plummeting share prices on the Wall Street and US unemployment suffering its biggest rise in 20 years.

Analysts believe the dollar’s protracted decline has been a major reason why oil prices have nearly doubled in the past year. 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.

The US Commodity Futures Trading Commission, a federal watchdog, has said it was six months into a probe of US oil markets focused on possible price manipulation.

Morgan Stanley, a US-based global financial services corporation, predicted that the oil may rocket to $150 a barrel as early as July while another financial agency, Goldman Sachs, suggested the price could reach the $200 mark within two years.

US airlines are taking the brunt of the heat. So far they have eliminated nearly 22,000 jobs this year, compared with 21,710 for the whole of 2007. They also are cutting routes and capacity and are ramping up prices.

Market analysts warned that the airlines across the world may increase air fares by 15 per cent to 25 per cent to meet the rising fuel costs.

At the White House, Press Secretary Perino urged the US Congress to take steps to save the US economy from going into recession. “We would ask the Congress to act on the things we think would have an impact -- not necessarily an immediate impact, but an impact, nonetheless, so that the future of our economy can continue to grow,” she said.

But such assurances did little to allay the woes of ordinary Americans who watched the prices jump from two to four dollars a gallon in less than two years.

Market experts also blamed an Israeli threat to attack Iran for the price hike. Iran is the second-biggest oil producer in the Organisation of Petroleum Exporting Countries, and an attack could disrupt global supplies.

Industrial troubles in Nigeria, another major producer, are also adding to market jitters.