The price of oil closed above $109 a barrel, its highest level in a year and a half, as the U.S. edged closer to intervening in Syria's civil war.
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. Secretary of State John Kerry said Monday that it was "undeniable" that the Syrian government used chemical weapons.
The U.S. Navy has four destroyers in the eastern Mediterranean Sea within range of targets inside Syria. The U.S. also has warplanes in the region.
U.S. benchmark oil for October delivery rose $3.09, or 2.9 percent, to close at $109.01 a barrel on the New York Mercantile Exchange. That's the highest closing price since February 2012, although oil remains far below its record close of $145.29 a barrel, reached on July 3, 2008.
While Syria is not a major oil supplier, traders are concerned that the conflict may draw in Iran, a key ally of Syria and a big oil producer. The Middle East nation also shares a border with Iraq, another larger oil producer in the region.
"The issue, of course, is not Syria itself but certainly, factions within Syria that are clients of Iran," said Addison Armstrong a director at Tradition Energy, an independent energy research firm.
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