Gas is getting a bit pricier ahead of Labor Day weekend.
The average U.S. price for a gallon of gasoline rose by 1.8 cents to $3.56 a gallon Thursday, its biggest overnight jump in six weeks, according to auto club AAA.
Gas is starting to track the rising price of oil, which reached a two-year high this week on fears of supply disruptions in the Middle East. Oil has risen 5 per cent in August on worries about escalating violence in Egypt and the possibility of U.S. strike against Syrian.
“It is increasingly likely that pump prices will rise in the coming days due to concerns about U.S. strikes in Syria and the potential consequences in the Middle East,” said AAA spokesman Michael Green.
Still, Green points out that Labor Day gas prices were 27 cents higher last year after Hurricane Isaac struck the U.S. Gulf Coast on Aug. 28 and refinery production lagged. Gas is about 13 per cent below its all-time high of $4.11, reached on July 17, 2008, after the price of oil had surged to a record.
On Thursday, the price of oil fell below $109 a barrel, easing off its two-year high as momentum for an attack on Syria appeared to slow.
Oil “is really going up and down with Syria,” said Paul Christopher, Chief International Strategist at Wells Fargo Investors. Concern of an imminent attack against Syria, “seem to have abated.”
New hurdles appeared to be slowing the formation of an international coalition to undertake a military strike against the Arab nation, which is suspected of a chemical weapons attack. Russia blocked British efforts to force a resolution at the United Nations. British Prime Minister David Cameron said his country would wait to join any military efforts until a U.N chemical weapons inspection team releases its findings.
The price of oil has surged 26 per cent since touching a low for the year of $86.68 on April 17. It has jumped because of political unrest in Egypt and the threat of U.S. intervention in Syria’s civil war. Neither country is a major oil exporter, but traders are concerned that the violence could spread to more important oil-exporting countries or disrupt major oil transport routes.
Benchmark oil for October delivery rose $1.09, or 1 per cent, to $110.10 a barrel on Wednesday, driven higher by the prospect of Western military intervention in Syria’s civil war. The price was oil’s highest closing level since May 3, 2011.
On Thursday, when an attack seemed less imminent, oil fell $1.30, or 1.2 per cent, to $108.80 a barrel on the New York Mercantile Exchange.
A rise in U.S. crude inventories helped lower the price.
The Energy Department’s Energy Information Administration said crude stockpiles for the week ended Aug. 23 climbed by 3 million barrels to 362.1 million barrels. Analysts had expected a slight fall.
Rising supplies tend to hold oil prices down.
Oil was also pushed lower by a stronger dollar, which makes crude priced in dollars more expensive and a less attractive investment for traders using other currencies. On Thursday, the euro was down to $1.3244 from $1.3340 late Wednesday in New York.
Brent crude, the benchmark for international crudes, fell $1.06 cents to $115.38 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Heating oil lost 2.3 cents to $3.19 per gallon.
— Natural gas rose 3.6 cents to $3.62 per 1,000 cubic feet.
— Wholesale gasoline fell 3.10 cents to $2.93 per gallon.