Over the past three months the price of crude oil has dropped more than $40. Prices at the pump have begun to leak down and Wall Street commodity traders who helped push the price to more than $140 per barrel this summer have backed off.

That’s a lot of good news. The bad news? Hurricane Ike is in position to undo it all.

Rumors swirled from Linden to Demopolis last night that gas could top $4 per gallon as soon as Friday night. While local station managers say that’s not likely it is far from inconceivable.

Gasoline prices jumped to unprecedented levels in the wholesale markets Thursday as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.

Crude oil on the futures market, however, sank below $101 a barrel to its lowest settlement price since late March — a sign that investors are still worried about waning global demand.

The wholesale price of gasoline ranged from $4 to nearly $5 a gallon in the U.S. Gulf Coast throughout the day on Thursday, said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J.

“I heard (unleaded fuel) may hit $4, so I came on out (Thursday night),” Demopolis resident Wendy Wallace said. “Fifty or 60 more cents a gallon adds up and I really didn’t need to fill up tonight. I was just afraid not to.”

Wallace’s fears were justified.

“We’re looking at the highest wholesale prices ever for a huge swath of the country,” he said. “People understand that regardless of what happens with Ike, it’s going to shut down the biggest refining cluster for a period of five, six, seven days.”

Wholesale prices are what refineries charge retailers. Retailers then mark up those prices for the customer to make a profit — so if these wholesale prices hold, it could mean that pump prices for U.S. drivers easily break through the July 17 record of $4.114 a gallon.

How fast those prices would hit the pump would depend on disruptions, if any, caused by Hurricane Ike.

“It almost looked like the worst was over,” Linden’s Michael Lewis said. “We made it through Labor Day, everything looked like we were headed back down…then, pow. I’ve got cattle to raise and this makes it tough. The price of fuel drives everything else. It’s hard, man.”

But despite the heightening anxiety about Ike, funds continued to liquidate their crude investments, anticipating a slower global economy and a stronger U.S. dollar.

Light, sweet crude for October delivery on the Nymex fell $1.71 to settle at $100.87 a barrel — the lowest close since March 24. During trading, the contract dropped as low as $100.10 a barrel.

The last time crude traded below $100 was April 2, and the last time it closed below that level was March 4.

“It’s a strange, strange world here,” Kloza said. “You might see an extraordinary thing — you may see crude oil less than $100 and retail gasoline more than $4 a gallon.”

Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity. Most are clustered along the Gulf Coast near such cities as Houston, Port Arthur and Corpus Christi. Exxon Mobil Corp.’s plant in Baytown, outside Houston, is the nation’s largest refinery.

Refineries are built to withstand high winds, but flooding can disrupt operations and — as happened in Louisiana after Gustav — power outages can shut down equipment for days or weeks.

The big question, however, is whether a possible disruption in gasoline distribution — not to mention the slow economy — would crimp demand and drive gasoline prices back down again.

“This could end up looking just like Katrina, whereby prices spiked substantially and came down just as hard,” said Linda Rafield, senior oil analyst for Platts, the energy research arm of McGraw-Hill Cos.

The Associated Press contributed to this report.