Gasoline rose along with crude as U.S. Secretary of State John Kerry said Syria will be held accountable for using chemical weapons, raising concern that a widespread military conflict will erupt, curbing oil output.
The motor fuel gained as much as 2.3 percent and West Texas Intermediate crude climbed as much as 3 percent. U.S. Defense Secretary Chuck Hagel said U.S. forces are ready to go if a strike is ordered. Syrian ally Iran’s Foreign Ministry warned that a U.S. attack on Syria would drag the whole region into conflict.
“The entire complex is finding a bid on rising political risk and the increased likelihood of a military strike on Syria,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. “All these countries are taking sides.”
Gasoline for September delivery rose 6.3 cents, or 2.1 percent, to $3.0147 a gallon at 9:56 a.m. on the New York Mercantile Exchange, the biggest gain since July 12. Trading volume was 17 percent above the 100-day average.
WTI for October delivery increased $2.91 to $108.83 a barrel on the Nymex. October Brent crude on the London ICE Futures Exchange advanced $2.70 to $113.43 and touched a six-month high at $113.60.
President Barack Obama hasn’t decided whether the U.S. will take military action in Syria, according to an administration official yesterday who asked for anonymity to discuss internal deliberations.
“Traders are concerned that what looks like imminent military action in Syria could further destabilize the region,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “It’s a region that’s been on tenterhooks for weeks now with concern there could be potential for some dislocation of supply.”
Pump prices, averaged nationwide, rose 0.1 cent to $3.542 a gallon, Heathrow, Florida-based AAA said today on its website. Prices are 20.8 cents below a year earlier.
Ultra-low-sulfur diesel for September delivery rose 6.84 cents, or 2.2 percent, to $3.1474 a gallon and touched a six-month high at $3.1502. Trading volume was 54 percent above the 100-day average. Prices are up 3.4 percent this month.
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