The New York Times reports that people are changing their habits thanks to $4 a gallon gasoline. Surprisingly, gasoline is not consuming as much of the family budget now as it did in 1979, but those high gas prices are hurting. Some people, me included, are skipping their traditional Memorial Day vacation -- opting instead for what AP dubs a Staycation.

People are certainly driving less. The Times reports that Americans drove 11 billion fewer miles than in March 2007, a decline of 4.3%. It is the first time since 1979 that traffic has dropped from one March to the next, and the month-on-month percentage decline is the largest since record keeping began in 1942.

And even though families are not paying as much of their income now as they did in 1979, we're funding our enemies -- Saudi Arabia, which supplied 15 of the 19 9/11 hijackers, is the U.S.'s second largest oil provider -- 80% more than we were five years ago. Americans spend 3.7% of their disposable income on transportation fuels -- that hit a low of 1.9% in 1998 and a high of 4.5% in 1981.

After yesterday's big jump in oil prices, it looked as though we might see the precious crude break through the psychological $110 barrier today, but that has not been the case. Oil hit a high of $109.64 earlier in the session, but is currently trading in the red at $108.38, down $0.71.

Yesterday's move was more a result of traders betting on future interest rate cuts that it was fundamentals justifying oil trading around the $110 mark. As recession fears continue to linger, you can be sure that interest in commodities will remain high, and oil prices will keep trading at near record levels for at least a little while longer.

Also, as I noted last week, we are quickly approaching the summer driving months. As we see gasoline prices at record levels, we have to expect to see prices creeping even a bit higher as demand starts to build this summer. In fact, last week we were given data that gasoline inventories were falling and demand was increasing. This was the first time since back in January that gasoline demand rose.