NEW YORK (AP) -- The price of oil climbed to a high for the year Monday amid concerns over an escalation in the civil war in Syria.
Benchmark oil for July delivery was up 37 cents to $98.22 a barrel on the New York Mercantile Exchange in afternoon trading. Earlier, crude rose to $98.74, the highest level since mid-September.
Concern that the conflict in Syria could spread and disrupt oil supplies from key producing countries has boosted oil. Jim Ritterbusch, president of oil consultancy Ritterbusch and Associates, speculated that those concerns added $2 to the price of a barrel.
Some analysts questioned how much more of a "security premium" could be packed into the price of oil. Julian Jessop, head of commodities research at Capital Economics, predicted in a note to clients that the U.S. and its allies would respond to any disruption in oil supplies by releasing oil from strategic reserves in order to suppress any price spike.
Hopes that the U.S. Federal Reserve will maintain its aggressive stimulus measures have also lifted oil and U.S. stock markets. The central bank's policy of ultra-low interest rates has made riskier assets like stocks and oil more attractive than low-yielding bonds.
Some investors worry that long-term interest rates could spike when the Fed tightens monetary policy, threatening the economic recovery. The Fed concludes a two-day policy meeting Wednesday.
The Dow Jones industrial average and the Standard and Poor's 500 index were each up about 1 percent Monday.
The election of Hasan Rowhani as president of Iran helped contain some of the upside in the price of oil. Considered a moderate, Rowhani's election is being viewed as lowering the potential of further conflict in the Middle East, which supplies around a third of the world's crude.
"At the very least, the election result makes it less likely that Israel will launch a military strike against Iran's nuclear facilities," Commerzbank added.
In the U.S., the average price for a gallon of gasoline dropped about 1.5 cents to $3.61. Prices in the Great Lakes region have begun to retreat after soaring for the past month when refinery outages caused a shortage of supplies.
Brent crude, a benchmark for many international oil varieties, was up 17 cents to $106.10 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:Wholesale gasoline was down 1 cent to $2.88 a gallon. Heating oil was flat at $2.97 per gallon. Natural gas advanced 13 cents to $3.86 per 1,000 cubic feet.