Crude oil nearly hits $99
Rising tensions over the civil war in Syria pushes energy prices higher. Brent crude, which affects gasoline prices, approaches $107 a barrel.
On May 31, crude oil in New York settled at $91.97 a barrel, and there were thoughts the price might break below $90.
On Monday, crude oil (-CL) briefly hit $98.74 a barrel before settling back to $97.77, down 8 cents from Friday. But the worry that crude oil might hit $100 a barrel is definitely at play, with the possibility of higher prices at the gas pump.
Brent crude, the benchmark North Sea oil that has a big influence on domestic gasoline prices, was at $105.57 a barrel after reaching as high as $106.67.
Light sweet crude is up 6.3% for the month and 6.5% on the year. Brent crude is flat for the month and down 5% in 2013.
So far, gasoline prices are steady. AAA put its national average retail price of gas at $3.611 a gallon, down from $3.614 on Sunday and basically unchanged for the month. But if Brent, in particular, moves higher, you'll pay more at the pump.
As it is, the AAA national average price is up 9.7% this year. But, if it's any solace, the price is still down from a 2013 peak of $3.786 a barrel.
The risk of higher oil and gasoline prices are that they will choke off consumer spending. A move over $100 for light sweet crude has typically proved a psychological blow for the economy.
The Syrian situation has morphed from a horrible civil war into a global tug of war. Late Thursday, the Obama Administration said it planned to send small arms and ammunition to rebel forces, after concluding the Syrian government had used chemical weapons against the rebels.
The administration had been wary of going even this far, but finally decided to extend the aid.
Oil speculators decided the move would be bullish for oil prices and immediately began to push crude oil prices higher. The U.S. Oil (USO) exchange-traded fund moved up to as high as $34.94 before falling back to $34.76, up a penny from Friday.
The rally appeared to lose steam Monday when another force in the markets -- the direction of U.S. interest rates -- trumped the energy play. The dollar strengthened against major currencies, trimming the oil rally as well as a solid advance for stocks.
Exxon Mobil (XOM) shares were up 93 cents to $91.51. Chevron (CVX) added 94 cents to $121.22. Oil-services giant Schlumberger (SLB) added $1.50 to $73.10. Halliburton (HAL) rose 69 cents to $43.62. And the Energy Select Sector SPDR (XLE) was up $1.15 to $81.06 on Monday, and is up 13.5% this year.
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