Gasoline futures prices were ready to close at their highest price in more than a month on Tuesday (Aug. 27), buoyed by strength in oil prices on the back of risks tied to Syria. And with the U.S. Labor Day holiday, the rally in the futures market may be a threat to prices at the pump, according to AAA.
MarketWatch reported that on Tuesday afternoon, September gasoline added nearly 9 cents, or 2.9%, to $3.04 a gallon on the New York Mercantile Exchange. That would be the highest settlement for a most-active contract since July 23, according to FactSet data.
The oil market is weighing the increased possibility of U.S. strikes in Syria and “motorists in the U.S. may pay higher gas prices in the days ahead if this sentiment continues,” said Michael Green, a spokesman for AAA said on Tuesday.
“The potential risk could break the recent trend of very stable prices at the pump,” he said. “Higher futures prices do not always translate to higher pump prices, but it should be a concern for motorists with Labor Day approaching.”
The average national price for a gallon of regular gasoline stood at $3.54 on Tuesday. Prices are already on track to be the fourth most expensive on record for the Labor Day holiday on Monday, according to AAA. The most expensive Labor Day average was $3.83 a gallon in 2012.
National average gasoline prices have been “unusually” stable, holding at $3.54 for 13 of the previous 15 days, Green said. They have declined 30 out of the previous 39 days for a total of 13 cents a gallon, “which is a very slow rate of decline,” he said.
“Motorists would be paying even less for gasoline today if not for the very expensive price of crude oil,” said Green. “Domestic West Texas Intermediate crude has closed above $100 per barrel every day since July 3, which is the same day the military took control of Egypt.”