The average price at the gas pump pushed toward $3.80 per gallon Monday as oil prices remained stubbornly high because of tensions tied to Iran's nuclear program.
The nationwide average for gasoline rose less than a penny overnight to $3.77 a gallon, which was the 27th consecutive day of gains, according to AAA, Wright Express and the Oil Price Information Service. The price has risen 32 cents, or 9.3 percent, since Feb. 1.
OPIS chief oil analyst Tom Kloza said the average price could reach $4.25 per gallon by later in March or April but the pace of the increase should slow. Gasoline has tracked oil prices, which have risen about 8 percent since the end of January. Also, refineries have begun switching to costlier summer blends of fuel. That adds about 10 cents to a gallon of gas.
Oil prices topped $107 per barrel in New York before falling back in afternoon trading. Investors remained concerned about potential supply disruptions stemming from the dispute between the West and Iran over that country's nuclear program. The United States, Europe and other nations fear that Iran may be building a nuclear weapon. Iran, the world's third-largest oil exporter, denies the charge.
President Barack Obama and Israeli Prime Minister Benjamin Netanyahu were scheduled to meet later Monday to discuss the issue. Obama said that the U.S. and Israel agree diplomacy is the best way to resolve the crisis but that the U.S. will consider all options.
Oil trader Stephen Schork said the current price of oil reflects investors' fear of military conflict. Analysts expect prices to continue to climb, but there are indications some investors may sell high oil prices appear to slow economic growth in some countries.
Prices also were affected by a temporary closure of a Midwest pipeline and a forecast for slower economic growth from China. The Chinese premier lowered the country's target growth rate to 7.5 percent from 8 percent.
Enbridge Inc. has closed a 467-mile oil pipeline that carries a nominal capacity of 317,000 barrels per day from Wisconsin to Indiana because of an accident. A company spokesman said that a portion of the line is expected to reopen Wednesday evening and the rest should be open by Thursday.
Benchmark crude fell 25 cents to $106.47 per barrel in New York after earlier hitting $107.42 per barrel. The price has been $106 per barrel or higher since Feb. 21. Brent crude rose 61 cents to $124.26 per barrel in London.
In other energy trading, natural gas fell 12 cents, or 4.7 percent, to $2.48 per 1,000 cubic feet, weighed down by weak demand during the mild winter. Heating oil rose 2.13 cents to $3.2232 per gallon and gasoline futures fell 0.22 cent to $3.2699 per gallon.
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