Oil prices shot up more than $3 per barrel in the futures market yesterday on a combination of news and rumors that all pointed to war in the Persian Gulf.
Light sweet crude rose $3.17 to $34.25 a barrel for December delivery contracts on the New York Mercantile Exchange, regaining more of the ground it had lost in a recent slide accentuated by a record one-day fall of $5.41 a barrel on Monday.
"Once again, the market is worried about confrontation," said Brian Tagler, a broker with Shearson Lehman Brothers Inc.
The increase in crude prices may put additional upward pressure on gasoline prices, experts say. Although the sharp drop in crude earlier this week to about $28 a barrel left the increase in crude smaller than the increase in gasoline prices since the invasion, oil's rebound has widened the gap again, which is likely to lead oil companies to continue to raise prices.
Yesterday, the American Automobile Association's Potomac branch said local gasoline prices continued to rise in the past week. AAA said the average cash price of a gallon of self-serve unleaded in the Washington area rose a half-cent to $141.5. Nationally, the average price is $1.38 a gallon.
Home heating oil rose 6.55 cents to 91.67 cents per gallon on November contracts. All later contracts were up by the limit of 4 cents a gallon.
Natural gas was up 0.6 cent to $2.446 per 1,000 cubic feet on December contracts. Most later contracts were trading lower.