Cost of oil jumps to $106, lifting gas prices to $3.55 per gallon

Courtesy of Associated Press — The price of oil rose to near $106 a barrel Friday. Gasoline prices jumped the most since mid-February, unwelcome news for summertime drivers.

Benchmark crude oil for August delivery gained $1.04 to $105.95 a barrel on the New York Mercantile Exchange. Even with a drop of $1.60 a barrel Thursday, the price of oil rose $2.73 this week and is up nearly 10 percent in July.

Drivers are seeing the impact. The average price for a gallon of gas in the U.S. rose 3 cents to $3.55 a gallon, the biggest one-day increase since Feb. 16, according to AAA. Prices rose 10 cents in both Indiana and Michigan.

The average price has gained 8 cents since Monday, reversing what had been a steady decline since the middle of June.

Fill-ups for summertime road trips could get even more expensive. Gasoline futures rose 10 cents, or 3.2 percent, Friday to $3.12 a gallon, and have risen about 37 cents in July.

“It would not be surprising to see the national average rise another 10-15 cents per gallon as the effects of higher futures and wholesale prices reach consumers at the pump,” wrote AAA spokesman Michael Green in an email.

Oil has risen from around $97 on July 1, mainly for two reasons. Traders are concerned that unrest in Egypt could affect oil shipments through the Suez Canal, a key shipping lane. And U.S. supplies of oil and gasoline have dropped dramatically in the past two weeks, signaling a rise in demand in the world’s largest economy.

Brent crude gained $1.08 to $108.81 on the ICE Futures exchange in London.

Category: Fuel & Oil