BANGKOK The price of oil ricocheted Wednesday as the U.S. edged closer to intervening in Syria's civil war, surging past $112 a barrel before giving up most of those gains.
U.S. Defense Secretary Chuck Hagel said Tuesday that American forces were ready to act on any order by President Barack Obama to strike Syria in response to the alleged use of chemical weapons in the conflict.
U.S. benchmark oil for October delivery was up 79 cents to $109.80 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. Earlier in the day, oil rose as high as $112.24.
Oil prices jumped $3.09 to close at $109.01 a barrel on the Nymex on Tuesday. Still, the price remains far below its record close of $145.29 a barrel, reached on July 3, 2008.
The price of oil is has surged more than 15 percent in the last three months on concerns over the civil war in Syria and unrest in Egypt. Neither country is a major oil exporter, but traders worry that the violence could spread to more important oil exporting countries or disrupt major oil transport routes.
"Syria's political-economic-military links to Iran, Hezbollah and Russia underline the threat of unintended chain-reaction resulting in wider regional instability. Threat of supply disruption is not insignificant," said Vishnu Varathan of Mizuho Bank Ltd. in Singapore in a market commentary.
Brent crude, the benchmark for international crudes, jumped 85 cents to $115.21 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
- Heating oil added 0.9 cent to $3.174 per gallon.
- Natural gas was steady at $3.534 per 1,000 cubic feet.
- Wholesale gasoline rose 1.6 cents to $2.929 per gallon.