Benchmark crude rises US$3.09, or 2.9%, to US$109.01/barrel on Syrian tensions; Brent up US$3.11 to US$114.28/barrel; wholesale gasoline rises 8 cents to US$2.91/gallon; natural gas adds 2 cents to US$3.57/mcf

NEW YORK , August 27, 2013 () – Oil climbs above $109 as tensions with Syria escalate; pump prices hold steady

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.

U.S. 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. U.S. 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.

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.

In the U.S., the average price for a gallon of gasoline remained unchanged $3.54 a gallon. Prices have held fairly steady over the past week, and are down 9 cents from a month ago.

However, wholesale gasoline futures, which signal the price drivers will pay at the pump, rose 3 percent Tuesday, mirroring oil's rise

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.

The price of oil was also boosted Tuesday by reports that protesters stopped production at key oil fields in western Libya on Monday. The chairman of Libya's National Oil Corp., Nuri Berruien, said production in the North African nation had slumped to about 200,000 barrels a day, about an eighth of its capacity, according to Bloomberg News.

The price of oil is has surged more than 15 percent in the last three months on concern that civil war in Syria and unrest in Egypt could disrupt production and exports, especially in Libya and Iraq. The threat of spreading violence could block important supply routes.

"The political uncertainty across Middle East has dominated the oil market in the last few months," said a report from Sucden Financial Research in London.

Brent crude, the benchmark for international crudes, was up $3.11 to $114.28 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Heating oil added 8 cents to $3.17 per gallon.

— Natural gas rose 2 cents to $3.57 per 1,000 cubic feet.

— Wholesale gasoline rose 8 cents to $2.91 per gallon.

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Pamela Sampson in Bangkok and Robert Burns in Brunei contributed to this report.

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