Oil prices shot up more than 4% on Monday as traders reacted to news of deadly violence in Israel over the weekend, leading to questions about whether the price of gasoline would follow suit.
Florida’s average gas price on Monday was $3.46 a gallon, 2 cents less than the previous Monday and 16 cents lower than a month ago, according to AAA’s weekly Gas Price Update.
Tempering the $3.47-a-barrel rise in the price of U.S.-produced crude oil, to just over $86 on Monday morning, was the fact that the price had plummeted over the previous week from $93.68 on Sept. 27 to $81.28 on Friday. And gas prices had fallen for three weeks despite oil’s rise to more than $90.
Experts said Monday’s oil price increase was a knee-jerk reaction while noting that little oil is produced in the region where the conflict is taking place.
Vandana Hari, CEO of Vanda Insights, told CNBC via email that oil prices would rise until “the market is satisfied that the event is not setting off a chain reaction and Mideast oil and gas supplies won’t be affected.”
Still, Hari noted that the conflict is “on the doorstep of an important oil-producing and exporting region.”
Patrick De Haan, head petroleum analyst for the price-comparison website GasBuddy.com, said he’s concerned about the potential for violence to spread beyond Israel and into the oil-producing Middle East region.
Israel could attack Iran if it finds that the major oil producer was involved in the attacks, De Haan said.
De Haan noted that last week’s oil-price plunge was a response to concerns about further interest-rate hikes by the Federal Reserve Board, particularly following Friday’s release of unexpectedly strong job-creation data in the U.S.. The Fed has been increasing interest rates to stem economic growth and ease inflation.
If the war in Israel does not widen, De Haan expects gas prices to fall another 25 to 45 cents a gallon by November amid surging U.S. oil production and higher gasoline inventories.
In South Florida, where prices tend to be higher than the rest of the state because of the higher cost of doing business, gas prices on Monday averaged $3.51 in Broward and Miami-Dade counties and $3.65 in Palm Beach County.
Bargain hunters know they can always find cheaper prices if they know where to look.
According to GasBuddy.com, the cheapest gas in the region could be found in western Broward County, where four stations on State Road 7 in Lauderdale Lakes were selling gas for $2.99: BP, 2099 North State Road 7; Shell, 1901 North State Road 7; Chevron, 2400 North State Road 7; and Exxon, 2599 North State Road 7.
In Palm Beach County, the lowest price without joining a wholesale club was $3.27 at Rocket Fuel, 100 N. Federal Highway, North Palm Beach.
Miami-Dade County’s cheapest gas was $3.13 at Murphy USA, 9203 NW 77th Ave., Hialeah Gardens and Exxon, 10190 NW 116th Way, Medley.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.