What's Behind the Flare-ups in Oil Prices?

Memorial Day, which marks the beginning of the summer driving season in the U.S., saw gas prices at nearly $4 a gallon all over the country -- and even higher in states such as Florida. Globally, the picture looks more worrisome: Oil prices crossed a record $135 a barrel during the weekend of May 24-25, although by Tuesday prices had come down to $131. What's behind these regular flare-ups in oil prices? What are the major economic and geopolitical factors at work? How does expensive oil affect the U.S. and world markets, and what can we expect over the coming months? Knowledge@Wharton discussed these questions and more with finance professor Jeremy Siegel, author of The Future for Investors, and Witold Henisz, a professor of management.